UBS raises gold price forecast to $5,000 by 2027

Saturday 08 - 14:30

By: Azzat Manal

UBS raises gold price forecast to $5,000 by 2027

Gold could be heading toward another period of strong gains, with UBS projecting that the precious metal may reach around $5,000 per ounce during the first half of 2027. The forecast reflects expectations that several structural factors will continue to support demand for gold amid persistent economic and financial uncertainty.

In a recent research note, UBS maintained a positive long-term outlook for gold while warning that prices could remain highly volatile in the short term. The bank expects fluctuations to continue as investors respond to changes in interest rates, inflation expectations, currency movements and geopolitical developments.

A key element of the bullish scenario is the anticipated evolution of U.S. monetary policy. UBS expects inflationary pressures in the United States to gradually ease, potentially allowing the Federal Reserve to keep interest rates broadly stable before resuming monetary easing in 2027.

Lower interest rates can increase the appeal of gold because the metal does not generate regular interest income. When bond yields and the U.S. dollar weaken, investors may become more inclined to hold gold as a store of value and a diversification asset.

Central-bank demand is another important factor behind UBS's forecast. Several monetary authorities have increased their gold reserves in recent years as they seek to diversify their holdings and reduce exposure to traditional reserve assets.

UBS estimates that central banks could purchase between 750 and 1,000 tonnes of gold during 2026. The bank noted that official-sector purchases reached approximately 289 tonnes in the second quarter alone, highlighting the continued importance of institutional demand.

The broader investment environment could also support gold if uncertainty surrounding economic growth, inflation and geopolitical tensions remains elevated. Gold has traditionally attracted investors during periods when confidence in financial markets or major currencies is under pressure.

However, reaching $5,000 per ounce is not guaranteed. Gold prices can respond quickly to unexpected changes in monetary policy, inflation, bond yields and investor sentiment. A stronger dollar or a prolonged period of high interest rates could reduce demand for the precious metal.

UBS's projection therefore represents a bullish scenario rather than a certainty. The bank's expectations underline the growing role of gold in global portfolios and central-bank reserves as investors seek protection against economic and geopolitical risks.

If central-bank purchases remain strong and monetary conditions become more supportive, gold could continue to benefit over the coming years. The metal's performance will nevertheless depend on how inflation, interest rates, currency markets and global economic conditions evolve.