Overview
Gold has continued its surge through the year, prompting UBS to revise up its price path for 2026. The bank increased its XAU/USD targets to $6,200 per ounce for March, June and September 2026, from a prior $5,000 projection. UBS nonetheless expects a moderate decline to $5,900 by the end of 2026, anticipating that prices will soften following the U.S. midterm elections.
Recent market levels and momentum
On Thursday, the metal traded at $5,344.98, after briefly touching $5,400 in the previous session. Year-to-date gains exceed 25%, building on last year’s record advance. Market observers note that gold is on track for its strongest monthly performance since the 1980s, while the current rally represents the metal’s most powerful move since 1979.
Drivers behind the rise
The latest upward leg has been attributed to several overlapping forces. Investment flows into gold have strengthened, exchange-traded funds have seen substantial inflows, and central banks have maintained buying programs. A softer U.S. dollar, investor demand for real assets amid geopolitical tension and institutional uncertainty, lower U.S. real interest rates, and concerns over U.S. domestic policy have all been cited as supporting demand.
Demand snapshot from the World Gold Council and UBS responses
Updated figures from the World Gold Council show that total gold demand in 2025 topped 5,000 metric tons for the first time when over-the-counter transactions are included. Investment activity was the principal contributor: ETF holdings rose by 801 metric tons, and bar and coin purchases climbed to a 12-year high of nearly 1,375 metric tons. Central bank purchases reached 863 metric tons in 2025, below some recent record levels but still elevated historically.
In response to these trends, UBS raised its 2026 demand outlook for most segments, while leaving its central bank purchase estimate at about 950 metric tons. The bank flagged Poland’s decision to raise its gold target from 550 metric tons to 700 metric tons as potentially meaningful, noting this could indicate lower price sensitivity if similar moves were made elsewhere. UBS also observed that physical demand in China has remained resilient despite record prices, aided by seasonal factors and positive sentiment, though it expects that demand may moderate after the Lunar New Year.
Scenario analysis and risks
UBS laid out an upside scenario of $7,200 per ounce and a downside case of $4,600 per ounce. It specifically noted that a more hawkish stance from the Federal Reserve could exert downward pressure on gold, while a sharp escalation of geopolitical tensions could push prices substantially higher.
This analysis reflects UBS projections and recent demand data without introducing additional assumptions beyond those presented by the bank and the World Gold Council.