Gold Price Forecasts Hiked as Geopolitical Tensions and Central Bank Buying Strengthen Demand
Major financial institutions have raised their gold price predictions, spurred by rising fears of trade wars and significant accumulation of the precious metal by central banks.
This week, both Citi and UBS increased their gold price targets, projecting continued strength in the gold market due to ongoing geopolitical risks and economic uncertainties. As a result, gold-backed cryptocurrencies, including PAXG and XAUT, have mirrored the price movements of gold, outperforming the broader crypto market amidst market instability. These tokens, backed by real gold held in vaults, have benefited from the growing demand for safe-haven assets.
Citi has raised its near-term gold price target to $3,000 per ounce and increased its annual average forecast to $2,900, up from $2,800. The revision is based on global growth concerns and the flight to safety that is driving demand for gold.
In a similar move, UBS increased its 12-month gold price target to $3,000 per ounce, a jump from $2,850. Gold has already surpassed this target, currently trading at $2,860, marking a 9% gain year-to-date.
Mark Haefele, UBS’s Chief Investment Officer, remarked that gold’s enduring appeal as a “store of value” amid uncertainty continues to prove its importance. Similarly, Citi highlighted that rising trade wars and geopolitical tensions are reinforcing the de-dollarization trend, which is increasing gold demand, especially in emerging markets.
As global risks escalate, both Citi and UBS predict that gold, along with gold-backed tokens, will continue to benefit from central bank purchases and the growing interest in the precious metal as a hedge against uncertainty.
