This week, Gold prices stabilized at around $2,650 per ounce. The recent strength of the dollar, rising US Treasury yields, and improved risk appetite for US Stocks have kept Gold prices fluctuating within a range. Since reaching a historical high at the end of October, Gold prices have fallen by more than 4.7%.

However, Gold prices are still nearly 29% higher than the beginning of this year, outperforming the S&P 500 Index. UBS Group has pointed out in its latest report that it remains Bullish on the Gold trend over the next 12 months.

UBS Group noted that central banks around the world are likely to continue increasing their Gold Shareholding to diversify their reserves. The latest data from the International Monetary Fund (IMF) shows that global central bank net purchases of Gold reached the highest monthly level of the year in October.

Based on the institution's past practice of underreporting this data, UBS Group now expects that, driven by de-dollarization, central banks will purchase 982 tons of Gold this year, higher than its previous forecast of 900 tons.

Although this figure is lower than the amounts purchased by central banks in the past two years, it represents a significant increase compared to the average of about 500 tons purchased annually since 2011.

Additionally, UBS Group pointed out that the demand for Gold as a key portfolio hedge tool is expected to rise. Although the policy agenda of the incoming US President Trump has been widely publicized, uncertainties remain in areas like fiscal policy, trade, and geopolitics, especially considering his transactional approach. With the ongoing Russia-Ukraine conflict and the complex situation in the Middle East, UBS believes that investors are cautious.Its price has soared to a historic high, closely related to market expectations of interest rate cuts by the Federal Reserve.Demand will further increase, thereby driving the inflow of funds into Gold Exchange-Traded Funds.

In addition, UBS Group believes that lower interest rates may support investors' reasons to continue holding Gold. UBS Group expects the Federal Reserve to cut rates by 25 basis points on Thursday and further relax monetary policy over the next year, which should reduce the appeal of holding this non-yielding Metal.opportunity costDue to falling interest rates and concerns over the trajectory of US government debt, the mid-term weakening of the dollar should also support Gold prices.

Therefore, UBS Group maintains a bullish outlook on Gold for the next 12 months, expecting this Precious Metal to reach $2,900 per ounce by the end of next year. UBS Group recommends allocating about 5% of Gold in a dollar-denominated balanced portfolio as a diversified investment. More broadly, UBS Group is also bullish on Copper and Other transition Metals in the long term, as the world's demand for these Metals is increasing with rising investments in power generation, energy storage, and electric transportation.