Gold prices have surged by 10 per cent in 2025, reaching $2,900 (£2,300), prompting UBS to revise its target price for the precious metal upwards once more.
UBS analyst Joni Teves commented on the performance of gold, noting that it has faced "unprecedented market dislocations" and achieved a record high in 2024, with expectations set for even higher movements in 2025, as reported by .
Teves pointed out that the gold market is currently driven by "deep-rooted bullish sentiment," as investors consider it a safe-haven asset amidst the highly uncertain and volatile macroeconomic climate.
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"After missing several buying opportunities in 2024, investors are likely wary of repeating the same patterns and may want to take advantage of corrections sooner this time around," she remarked.
Teves also mentioned that factors such as uncertainty over tariffs, concerns about the return of stagflation, and ongoing global conflicts could see gold continue to benefit from its 'safe haven' status.
Furthermore, UBS anticipates stronger-than-expected official sector demand, bolstered by initiatives like China's pilot programme that permits insurance companies to invest in gold, providing significant support to the market.
The bank's updated forecasts suggest that gold will rise to $3,200 later in the year before gradually declining, yet still ending 2025 above $3,000. UBS also observed a continued lack of investor positioning in the precious metal, indicating "suggesting plenty of scope to add gold to portfolios."
Alec Cutler, director at Orbis Investments, has noted that despite the soaring price of gold, Western investors have largely refrained from flocking to this asset class. "The number of iShares and SPDR ETF investors has been dropping for the last two years... meaning gold's rally so far is being driven by central banks and Asian investors," he shared with City AM.
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He suggested that the robust returns of the 'Magnificent Seven', coupled with the allure of cryptocurrencies, have deterred investors from gold, but this trend is likely to change over the course of the year. Consequently, Cutler anticipates that the rally in gold will gain further momentum once Western investors start investing in it.
On a different note, UBS analysts have maintained their forecasts for other precious metals, such as silver and platinum, unchanged.
While they acknowledged the potential of these metals to outperform gold from their current positions, they pointed out that silver is plagued by higher volatility and lower investor confidence, and interest in platinum could "stay muted" due to liquidity issues, making them hesitant to alter expectations.