UBS expects gold prices to rise by another 20%. Why does the bank believe in the continuation of the rally?

UBS raised the "bullish" scenario on the price of gold from $4700 to $4900 per ounce, reports Seeking Alpha. The new price implies growth of another 20% from the current level. The bank also increased its base average annual forecast for 2026 - from $4200 to $4500, while the pessimistic one remained at the same level - $3700 per ounce. The bank believes that after the mid-term elections in the U.S. at the end of 2026, the price of precious metal may be temporarily fixed around $4300, and in case of growth of political and financial risks it is quite possible to realize the "bullish" forecast.

UBS still sees gold as an attractive asset, holds a long position in its global portfolio and emphasizes that the metal remains a reliable hedging instrument even at current prices. According to the bank's assessment, all key drivers of gold's growth this year are still in place, so the market is entering a new phase of increased demand - both from investors and central banks.

Analysts of the investment bank forecast that demand for gold will remain high due to a combination of factors: further reduction of the Federal Reserve rate and falling real yields, continuing geopolitical tension, increased attention to the mid-term elections in the United States and growing fiscal risks. Additional support for the market may also be provided by a recovery in demand for jewelry in the second half of 2026.

At the trading on November 20, the spot price of gold was almost unchanged - it was traded at $4064 per troy ounce. After the 2025 rally, during which the precious metal rose in price by almost 60% and became the most profitable asset since the beginning of the year, prices have consolidated at around $4000 per ounce.

This article was AI-translated and verified by a human editor