3 reasons UBS sees gold surging 30% in the next year

• UBS forecasts gold prices to rise 28% to $5,200 per ounce in the next 12 months.
• The bank cites Fed policy shifts, a weaker dollar, and central bank buying as key drivers.
• UBS suggests a mid-single digit gold allocation for diversification amid market and economic stress.

After a rough patch for gold, UBS says the precious metal is set to surge about 28% over the next 12 months.

Gold prices are down 23% since their January highs to around $4,040 an ounce, following a 150% gain from early 2024 to early 2026.

But in a June 25 note, UBS said a mix of three factors should drive a recovery in prices to about $5,200 an ounce.

First, the bank said that investors are overestimating the hawkishness of the Federal Reserve after Kevin Warsh's first meeting as the central bank's chairman. The Fed's next move is more likely to be a cut than a hike, the bank said, and when those expectations shift, it should be a boon for gold.

The Fed tends to cut interest rates when the economy needs a boost, which is also when investors might seek out safe haven assets like gold. UBS said they expect economic growth in slow over the next year.

Second, the US dollar should weaken as long positioning in the currency is "stretched," and as fiscal deficits continue to rise.

"A weaker dollar has historically been a powerful tailwind for gold," Ulrike Hoffmann-Burchardi, the bank's global head of equities, said in the note.

And third, global central banks should continue buying up the yellow metal. In May, for example, Poland and China bought 18 and 10 metric tons of gold, respectively. The bank said annual demand should remain steady, providing a floor for prices.

As for how gold fits into a portfolio, Hoffmann-Burchardi said UBS an appropriate allocation for investors might be in the mid-single digit range.

Hoffmann-Burchardi wrote. "Its relatively low historical correlation with traditional asset classes means that it should add to overall portfolio resilience over time."

The bullish UBS outlook comes as other banks have slashed their 2026 price targets. Goldman Sachs now sees the rising less than it previously predicted, hitting $4,900 an ounce by year-end, down from $5,400. ING, meanwhile, expects gold to end the year around $4,600, lower than its earlier forecast of $5,000.

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