Gold Price Hovers Around $4,400! UBS: To Rise to $5,200 by End-June 2027 – Consider Allocation Below $4,000

The Chief Investment Office (CIO) of UBS Wealth Management has issued a new forecast, predicting that gold will enter the '5,000' range in the first half of next year and clearly stating a target of $5,200 per ounce by the end of June 2027. However, if gold prices retreat below $4,000 in the short term, this should be viewed as a strategic opportunity to establish positions.

Spot gold has made a strong comeback recently, breaking through the $4,400 threshold during trading on Tuesday (the 11th), reaching $4,434.95, and surging 7.4% last week—the strongest performance since January this year.

UBS pointed out that this rebound is driven by three converging forces: institutional buying from China and renewed fund inflows into gold ETFs, cooling market expectations regarding the Federal Reserve's (Fed) interest rate path, and continued central bank gold purchases being reaffirmed.

China's central bank increased its holdings by nearly 20 tons last month to 76.08 million ounces—the largest monthly increase since the end of 2023 and marking 21 consecutive months of net buying. Global central banks net purchased 289 tons in Q2 this year, up 62% year-on-year. UBS estimates that official purchases for the full year will remain within the range of 750 to 1,000 tons.

The medium- to long-term logic remains unchanged. With inflation cooling, the Fed is expected to hold steady this year and resume easing in 2027. Declining real interest rates reduce the opportunity cost of holding gold. Meanwhile, the U.S. twin deficits and the over-allocation to dollar-denominated assets create underlying pressure for the dollar to weaken over the medium term. De-dollarization continues to drive capital flows toward reserve diversification.

UBS emphasized that while central bank buying alone may not directly push up gold prices, it can offset weak jewelry demand and provide market support.

UBS advises investors to separate short-term volatility factors—such as stronger U.S. data or oil-driven inflation expectations—from long-term allocation strategies. Investors preferring physical assets can allocate a low single-digit percentage of gold within diversified portfolios, combined with broad commodities. However, if prices fall below $4,000, it represents a signal to 'add exposure,' not to 'retreat.'

Additionally, according to a mid-year survey report released on Tuesday by the London Bullion Market Association (LBMA), the global authority on precious metals, analysts have revised down their gold price forecasts compared to six months ago. However, they believe gold prices still have up to an 18% upside from recent trading levels by year-end. The July survey interviewed 16 analysts, with the highest forecast projecting year-end gold prices at $5,100 and the average expectation at $4,500.

In the LBMA's January survey this year, supported by expectations of Iran-related tensions and the wave of central bank gold buying, some analysts predicted gold prices could rise to $7,000.