Gold prices are up to record highs, reaching an average of $3,500 per ounce in April. UBS, the Swiss investment bank, is benefiting from a current tailwind. On the back of these developments, they have upped their gold price forecast, projecting it will skyrocket to $3,600 an ounce by Q1 2026. This change represents a $100 increase from their last prediction, which points to an increasing confidence in the gold market.
According to the bank’s analysis, there are significant and historic strides in global gold demand. It’s forecast to grow 3 percent, hitting 4,760 tonnes in 2025. If this occurs, it would be the most gold demanded at this level since 2011, marking a robust recovery and boom in the gold market. Central banks around the world are going to have a key role in rapidly accelerating this trend. Although purchases should remain vigorous, they’ll be below the near-record levels witnessed last year.
The next phase of gold’s momentum is just beginning. A record surge in inflows into exchange-traded funds (ETFs) has pushed these latencies to levels not experienced since the pandemic during the first half of 2025. This trend persisted into July showcasing strong investor confidence in gold as a safe-haven asset during continued global uncertainty.
“Central bank purchases should stay strong, albeit slightly below last year’s near-record purchases. We, therefore, now forecast global gold demand to increase by 3 percent to 4,760 tonnes in 2025, which would mark the highest level since 2011.”
Over the last few months, gold has made a base and moved laterally within the $3,300 channel. UBS analysts are betting that prices are set to reach new all-time highs in the next half year. Drivers behind this optimistic outlook range from ongoing U.S. macro-related headwinds to changing geopolitical conflicts.
Further, central banks have been diversifying their reserves beyond fiat currencies out of fear of destabilization of the dollar. Consequently, the demand for gold is projected to skyrocket. Pressure on the Federal Reserve’s independence has recently reached a boiling point. Meanwhile, worries over fiscal sustainability are pushing de-dollarization trends even further.
UBS’s adjusted forecast takes into account today’s new market reality and sets the stage for coming price increases. The expected jump in global gold demand represents much more than a market boon, as investors look for shelter from shaky economic realities.
“Despite the dialing back of some trade frictions, we see U.S. macro-related risks, questions over Fed independence, worries about fiscal sustainability, and geopolitics underpinning de-dollarization trends and more central bank buying. In our view, these factors will drive gold prices even higher.”
As central banks continue to diversify their reserves away from traditional fiat currencies amid fears surrounding dollar stability, the demand for gold is expected to grow. The ongoing discussions regarding the independence of the Federal Reserve and concerns about fiscal sustainability further intensify these de-dollarization trends.
UBS’s adjusted forecast reflects not only the current market dynamics but also lays the groundwork for future price movements. The anticipated increase in global gold demand signals broader economic implications as investors seek refuge from volatile market conditions.