Despite near-term pressure from elevated real yields and regional conflict, UBS maintains a positive long-term outlook for gold as a portfolio diversifier. Price targets are set at USD 4,600/oz for year-end 2026 and USD 5,200/oz for June 2027.
Key Takeaways
- 1.Gold faces near-term headwinds from high interest rates and Middle East conflict, but remains a strategic portfolio diversifier.
- 2.We forecast gold to recover to USD 4,600/oz by year-end and USD 5,200/oz by June 2027.
- 3.The inverse correlation between US real yields and gold has reasserted itself, with a correlation near -0.6.
Table of Contents
- Key message
- 01 The Middle East crisis has presented headwinds for gold.
- 02 While a US-Iran peace deal will help, the outlook for gold has become less bright.
- 03 That said, we expect gold to recover over the coming year and see it as a good diversifier for portfolios.
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Authors
Dominic SchniderGiovanni StaunovoChristopher SwannJon Gordon
Securities
XAU2-year US Treasury Yield
Themes
Geopolitical RiskMonetary PolicyPortfolio Diversification
Regions
Middle EastUnited StatesIranIsrael