Gold, trading around $2,650/oz, is poised for further gains in 2025, according to UBS strategists. The metal has risen 28% year-to-date, significantly outperforming the S&P 500.
Key Drivers for Gold’s Continued Upside:

Central Bank Accumulation:

October saw the highest monthly gold purchases by global central banks in 2023, per IMF data.
UBS revised its 2024 forecast for official sector gold purchases to 982 metric tons, projecting a similar trend for 2025 with over 900 metric tons expected.

De-dollarization Efforts:

Central banks are diversifying reserves, with gold purchases driven by efforts to reduce reliance on the US dollar.

Investor Demand for Safe Havens:

Ongoing geopolitical tensions, including conflicts in Ukraine and the Middle East, coupled with fiscal and trade uncertainties, are bolstering gold’s appeal as a hedge.
Inflows to gold ETFs are expected to rise amid market volatility.

While rising US Treasury yields and a strong US dollar have capped short-term gains, UBS remains optimistic about sustained momentum in gold prices as global economic and political conditions evolve.
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