UBS has become the latest bank to raise its gold price target, citing the increasing likelihood of a continued escalation in the global trade war. Analysts expect ongoing trade tensions to drive investors toward gold, the ultimate safe-haven asset.
In a report released on Monday, UBS analysts Wayne Gordon and Giovanni Staunovo stated that gold prices are expected to reach $3,200 per ounce over the next four quarters, up from their previous forecast of $3,000 per ounce. The escalating trade conflict further underscores gold’s role as a store of value in uncertain times.
UBS highlighted that U.S. President Donald Trump’s plan to implement broad reciprocal tariffs and additional industry-specific tariffs on April 2 presents an imminent risk event, likely to fuel continued safe-haven demand across the market.
Gold Breaks $3,000 as Economic Concerns Mount
Last week, spot gold prices surpassed the psychologically significant $3,000 per ounce level for the first time. Analysts believe gold prices will continue to benefit from a deteriorating outlook for the U.S. economy.
Traders increasingly anticipate further interest rate cuts by the Federal Reserve this year as recession concerns grow. Wall Street’s unease about the U.S. economic outlook has intensified as Trump’s tariff policies take effect.
Last week, Goldman Sachs lowered its forecast for U.S. GDP growth in 2025 from 2.4% to 1.7%.
“In other words, we are moving from a ‘Trump put’ to a ‘Fed put,'” UBS analysts commented.
From a long-term diversification perspective, UBS maintains that allocating about 5% of a balanced U.S. dollar portfolio to gold remains optimal.
Growing Investment in Gold ETFs and Central Bank Demand
UBS analysts also highlighted that more funds are flowing into gold-backed exchange-traded funds (ETFs), with sustained ETF demand expected to play a key role in further price increases. Additionally, strong demand from central banks will continue to provide crucial support, with purchases projected to remain close to recent levels of approximately 1,000 metric tons per year.
As of Monday, spot gold prices were trading around $3,000 per ounce. So far this year, gold prices have risen approximately 14%, marking a third consecutive year of strong growth momentum.
Major Institutions Raise Gold Price Targets
In recent weeks, several major financial institutions have revised their gold price forecasts upward:
- Goldman Sachs recently increased its year-end gold price target to $3,100.
- Macquarie Group last week projected that gold prices could surge to $3,500 per ounce by Q3 2025.
With increasing economic uncertainty and trade tensions, gold continues to solidify its position as a premier safe-haven asset in global markets.
