UBS Raises Gold Price Target to $5,400
UBS has extended its gold price forecast by one quarter, setting a new target of $5,400 per ounce for the end of September 2027. The bank expects further upside for gold, supported by declining real interest rates, sustained investment demand, and a weaker US dollar.
The new forecast assumes that disinflation in 2027 will allow the US Federal Reserve to adopt a more accommodative monetary policy. UBS strategists also expect broad-based weakness in the US dollar. Meanwhile, the bank has maintained its end-2026 gold price target at $4,600 per ounce.
Gold prices have risen in recent sessions as investors reassess the outlook for US monetary policy and the direction of the dollar. Uncertainty surrounding the Federal Reserve’s near-term interest-rate path, combined with weaker US labor market data, has strengthened expectations that the Fed could keep interest rates unchanged if inflation remains under control.
Investment demand for gold has also improved. Gold ETF inflows have resumed, initially led by China and more recently by Europe, while central bank purchases remain strong. According to the World Gold Council, central banks recorded net gold purchases of 51 metric tons in June. The People’s Bank of China added another 20 metric tons to its reserves in July, marking its largest monthly increase since October 2023.
Three Key Drivers for Higher Gold Prices
UBS strategists identified three conditions that could allow the gold rally to continue: a sustained decline in the US dollar, lower expected US real interest rates, and stronger investor demand.
The bank’s base case assumes that the Federal Reserve will leave interest rates unchanged in September, although UBS highlighted uncertainty over the possibility of additional rate increases later this year.
On the demand side, UBS estimates that approximately 500 metric tons of investment demand per quarter could be required for gold to trade sustainably at or above the $5,000-per-ounce level.
Gold Outlook for 2027
The higher long-term forecast reflects UBS’s view that disinflation could become a more prominent theme in 2027. Favorable base effects and expectations that US economic activity will remain at or below trend could put additional pressure on the dollar and provide further support for gold prices.
With this outlook in mind and options volatility remaining above 20%, UBS strategists favor volatility-selling strategies, including selling downside gold price risk to generate additional returns.
UBS also sees potential buying opportunities if gold prices experience a correction. The bank said that a decline toward $4,000 per ounce could offer an opportunity to increase gold exposure.
Key Risk to the Gold Forecast
The main risk to UBS’s bullish gold outlook is another Federal Reserve rate hike this year. Higher interest rates could push real yields higher, strengthen the US dollar, and weaken investment demand for gold.
Under this bearish scenario, UBS estimates that gold prices could decline and potentially test the $3,850-per-ounce level.
Overall, UBS remains bullish on gold over the longer term, with its $5,400 target for September 2027 signaling confidence that lower real yields, weaker dollar conditions, and sustained investment demand could continue to support the precious metal.