UBS Group forecasts that as Trade and geopolitical uncertainty drive demand for safe-haven Assets, Gold will reach new highs later this year after posting its largest annual gain since 2010.
After a 27% increase in 2024, Gold prices have slightly increased this month, approaching $2,670 per ounce. UBS Group stated that while a stronger dollar and rising US yields will be headwinds in the first half of the year, this will be offset by demand, and Gold prices are expected to rise to $2,850 by the end of the year.
The bank pointed out the unpredictability of the Trump administration and stated that demand for Gold from central banks and investors should remain strong. The bank also indicated that stock market volatility should become more frequent.
We expect that in 2025, Gold as a diversified investment tool will be more relevant to investors, wrote UBS Group Analysts Wayne Gordon and Giovanni Staunovo in the report; in other words, the situation might be very similar in 2025.
Gold prices remained basically flat on Tuesday, down 1% from the previous trading day, as an unexpectedly strong US employment report led some economists to lower expectations for further rate cuts by the Federal Reserve. Higher borrowing costs often diminish the appeal of Gold.
Gold prices were supported as investors sought safe-havens due to uncertainty surrounding Trump's second term starting on January 20, helping it break free from the pressure of a stronger dollar and rising Bond yields.
UBS Group also expects Silver prices to rise this year, estimating a price of $38 per ounce by the end of the year, partly due to strengthened manufacturing demand.
At 11:51 London time, spot Gold rose by 0.2% to $2,667.87 per ounce. The Bloomberg Dollar Spot Index fell by 0.2%. Silver prices slightly increased to $29.74, while Platinum slightly declined, and Palladium remained steady.
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