Demand for gold is expected to rise further in the coming months, driven by interest rate cuts, lower bond yields, financial challenges, and political turmoil in the United States, according to a new report from Swiss bank UBS.
“The metal has recently recovered part of the decline it recorded in late October, and we expect rising demand for gold to continue supporting prices going forward,” wrote UBS’s Chief Investment Officer.
He added: “We believe that further interest rate cuts by the Federal Reserve, lower real yields, mounting fiscal risks, and shifts in the domestic political environment in the United States will extend the current strong buying trends from central banks and investors.”
On November 20, UBS raised its mid-2026 gold price target to $4,500 per ounce—up from a previous $4,200. The bank also increased its bullish target by $200, to $4,900 per ounce, in light of potential heightened political and fiscal risks. However, it maintained its downside target at $3,700 per ounce.
UBS analysts said that the deterioration in the U.S. fiscal outlook will likely support continued gold purchases by central banks and investors, and they expect ETF demand to remain strong in 2026.
On the other hand, they warned that potential Federal Reserve tightening and the risk of central bank gold selling remain two major challenges to their bullish outlook.
On November 3, UBS analysts said the current pullback in the gold market is only temporary, and that they expect a bullish scenario in which escalating geopolitical or market risks could push the metal to $4,700.
“The long-awaited correction has now stalled,” they wrote in a research note. “Apart from technical factors, we see no fundamental reason for the heavy selling.”
The Swiss banking giant noted that “waning price momentum led to a second wave of declines in open futures positions,” but emphasized that underlying demand remains robust.
UBS analysts also cited the World Gold Council’s third-quarter Gold Demand Trends report, which confirmed “strong and accelerating” purchases from central banks and individual investors.
They wrote: “Central bank buying of 634 tonnes so far this year has been slower than last year’s pace, but it has begun to recover in the fourth quarter, in line with our forecast of 900–950 tonnes for 2025.”
ETF inflows of 222 tonnes and physical demand for bars and coins exceeding 300 metric tonnes for the fourth consecutive quarter indicate that investor appetite has also strengthened.
UBS noted that “jewelry demand has not been as weak as expected.”
“We prefer buying gold on dips,” the analysts said, adding that they still believe investors “remain under-allocated” to the metal. UBS recommends a mid–single-digit percentage allocation to gold within investor portfolios.
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