Gold’s powerful rally appears set to extend well beyond 2025, according to a new outlook from UBS analysts, who argue that a durable shift in global demand is reshaping the market. The bank maintains that gold will remain supported amid persistent macro uncertainty, a steady pace of central-bank purchases, and ongoing de-dollarisation trends across emerging economies.
Analysts say gold entered 2025 as a “consensus long,” but despite its popularity, classic indicators such as Comex futures positioning and ETF flows show little evidence of excessive speculation. Instead, UBS attributes the rally to broad-based buying from both private and official sectors, reinforcing the view that the market is undergoing a structural transformation.
After a sharp upward move between late August and mid-October, gold has since consolidated. But UBS argues the backdrop remains resilient, noting that none of the conditions that defined the past five major gold bear markets—ranging from strong economic growth to aggressive real-rate tightening—are present today.
Central Banks Extend Their Buying Cycle
One of the most significant forces behind gold’s strength, according to UBS, is the ongoing accumulation by central banks. Analysts expect sovereign buyers to remain active even if prices push higher, citing a combination of slower global growth, sticky inflation, and a weaker U.S. dollar. Elevated geopolitical risk and shifting reserve-allocation strategies further support bullion demand.
UBS sees a sustained tailwind from countries diversifying away from the dollar, with gold continuing to benefit from these long-range policy trends. The bank’s strategists forecast an average price of $4,675 per ounce in 2026, representing roughly 10% upside from current levels. Even if gold trades in a broad range—around plus or minus $4,000—UBS believes the risk-reward profile remains constructive.
Key Drivers Supporting Gold Prices
- Strong central-bank buying
- Slower economic growth outlook
- Persistent inflation pressures
- De-dollarisation across emerging markets
- Elevated geopolitical risk
Gold Miners Outperform as Cash Flow Surges
The rally in bullion has already ignited a powerful response in gold-mining equities. The GDX index is up more than 140% year-to-date, outperforming gold by about 80%. Record free cash flow, improved balance sheets, and disciplined capital deployment have further strengthened the sector’s appeal.
Analysts see room for additional multiple expansion as operational reliability improves and investor confidence rebuilds. Despite the strong run, gold-mining shares still discount an implied long-term gold price of $3,725 per ounce—well below current spot levels.
UBS highlights several companies as top picks: Barrick Gold, Newmont Corp., Endeavour Mining, SSR Mining, and Franco-Nevada, citing their capital discipline, asset quality, and leveraged exposure to higher gold prices.
