UBS Sees Gold Prices Reaching $5,000 per Ounce by 2027
Gold prices have surpassed $4,250 per ounce for the first time since June, breaking their recent trading range of $4,000-$4,100 per ounce.
UBS, a large Swiss banking and financial services group, attributes this upward momentum to increased gold buying activity from institutional investors in China, as well as capital flows into exchange-traded funds (ETFs).
The firm also notes that recent coordinated efforts between the US and Japanese governments to stabilize the yen may have contributed to limiting the risk of selling off US Treasury bonds.
However, UBS warns that gold prices are still facing many risks in the short term, including potential pressure from positive US economic data, prolonged inflation concerns due to oil prices, or continued expectations for a tougher monetary policy from the Federal Reserve (Fed).
In the medium and long-term, UBS assesses that gold's outlook is supported by sustainable drivers, including reduced real interest rates, a weaker USD, and central bank buying activities.