UBS pushed its gold price target to $5,400 per ounce by the end of September 2027, citing falling real interest rates and steady investment demand. In the short term, though, gold is stuck in a five-day sideways range between $4,310 and $4,449.
UBS extended its forecast horizon by one quarter, setting a new $5,400-an-ounce target for the end of September 2027. The bank's strategists said further gains depend on falling real interest rates and sustained investment demand, while its end-2026 forecast stays unchanged at $4,600 per ounce.
Why UBS sees room to run
The bank's new target assumes disinflation in 2027 will support a less restrictive U.S. monetary policy stance, with the dollar weakening broadly. UBS strategists outlined three conditions for the rally to extend: continued dollar weakness, a decline in expected U.S. real interest rates, and strengthening investor demand. Their base case has the Fed holding rates unchanged in September, though they flagged uncertainty over additional hikes later this year.
Demand has also picked up. According to the World Gold Council, central bank net purchases reached 51 metric tons in June, and the People's Bank of China added 20 metric tons to its reserves in July, its largest monthly increase since October 2023. UBS estimated that roughly 500 metric tons of investment demand per quarter is likely needed for gold to trade more sustainably at or above $5,000 per ounce.
Price action stays choppy near term
However, the near-term picture looks less certain. Gold has been trading in a five-day sideways range between $4,310 and $4,449, and that pattern is likely to hold a while longer as the last two weeks of August tend to stay quiet. The metal broke support at $4,355/$4,345, with a break below $4,305 seen completing a short-term double-top sell signal that could trigger further losses toward $4,220/$4,210.
Elsewhere, gold bounced 0.7% to $4,366 on the day after falling to around $4,335 during Asian trading, following a break below its 100-hour and 200-hour moving averages that turned the near-term bias more bearish. Buyers still need to clear the 200-hour moving average at $4,368 and the 100-day moving average at $4,381 to revive the broader uptrend.
UBS itself acknowledged the main risk to its bullish view: a Fed rate hike this year, which could lift real yields, support the dollar, and weaken gold demand — a scenario in which the bank sees gold falling to test $3,850 per ounce. According to UBS: "Price pullbacks to $4,000/oz offer opportunities to add gold exposure, in our view."
Sources: Investing.com, Investing.com, InvestingLive
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