UBS: Gold prices have surged to $6,200 this year! A triple whammy of the Fed, geopolitics, and demand – is gold about to enter a historic super bull market?
2026-02-24 09:15:47
Amidst the volatile global markets, UBS, a leading international investment bank, has once again released a significant forecast: gold prices are poised to reach $6,200 per ounce by mid-2026. This astonishing target represents a substantial increase of over $1,000 from current levels, driven by three core forces: continued easing by the Federal Reserve, escalating geopolitical risks, and a robust recovery in global demand. UBS analysts bluntly state that gold has not yet fully absorbed the current geopolitical shocks, and once all positive factors are fully realized, gold prices will experience a new round of explosive growth.
UBS points out that gold's reaction to recent geopolitical tensions around Iran has remained relatively restrained, but this precisely implies significant upside potential. The US military deployment in the region has reached an unprecedented scale—two aircraft carriers, a large number of fighter jets, and refueling aircraft are simultaneously assembled, exceeding even the levels seen before Trump's actions against Venezuela earlier this year. Analysts emphasize that the likelihood of military action against Iran in the short term is significantly increasing, and Trump's consistent diplomatic style suggests that geopolitical uncertainty is unlikely to subside in the near future.
While historical experience shows that geopolitical events typically do not have long-term structural impacts on global markets, they often trigger sharp short-term spikes in volatility. In such an environment, investor demand for classic safe-haven assets like gold is rapidly ignited. UBS believes that it is precisely this persistently high level of geopolitical risk that provides a solid foundation for gold prices, allowing them to continue to shine amidst market turmoil.
Meanwhile, the Federal Reserve's shift in monetary policy has become another major engine for gold price increases. UBS analysts explicitly stated that a weaker dollar and lower US real interest rates are the most direct positive factors for gold, and the current macroeconomic environment is expected to maintain this trend. Even with recent strong US employment data and some hawkish comments in the latest Fed meeting minutes, inflationary pressures are expected to gradually ease in the coming months. Furthermore, the Fed's personnel structure is expected to be more dovish later this year, all of which point to further room for interest rate cuts.
UBS specifically predicts that the Federal Reserve will implement two 25-basis-point rate cuts by the end of September 2026. This easing path will not only continue to suppress real interest rates but also weaken the dollar exchange rate, thus providing a continuous upward momentum for gold prices. Analysts emphasize that the Fed's easing cycle still has considerable room for maneuver, meaning that the macroeconomic support environment for gold will remain intact in the coming months.
Demand has also seen explosive growth. According to data from the World Gold Council, global gold demand surpassed 5,000 tons for the first time in 2025, and UBS predicts this figure will continue to climb in 2026. The driving forces are mainly threefold: first, a significant recovery in investment demand; second, central banks maintaining a strong pace of gold purchases; and third, long-term structural demand for gold jewelry driven by rising incomes among Asian residents.
In stark contrast to demand, gold supply has stagnated for a long period. UBS, citing data from Wood Mackenzie, points out that while high gold prices may stimulate some mines to explore and expand production, as many as 80 mines will face the prospect of exhausting their current production plans by 2028. This supply-demand imbalance will lay the most solid fundamental foundation for a long-term rise in gold prices.
On February 16, Dominic Schneider, Chief Investment Officer for Commodities and Asia Pacific FX at UBS Wealth Management, further reinforced this view. He stated that as recent market volatility gradually subsides, the fundamentals for gold and other key commodities remain strong. Schneider predicts that gold could reach a high of $6,200 per ounce, supported by central bank purchases, investor demand, large fiscal deficits, lower US real interest rates, and geopolitical risks.
Schneider specifically advised that investors who have not yet allocated gold should establish a position as soon as possible, while those who already hold a significant amount of gold and have realized substantial unrealized profits can diversify some of their holdings into other commodities such as copper, aluminum, and agricultural products to further optimize the risk-return structure of their portfolios. He emphasized that in 2026, commodities will play a far more important role in global investment portfolios than ever before, especially against the backdrop of supply and demand imbalances, geopolitical risks, and energy transition, where gold's value as a core hedging tool will become increasingly prominent.
It's worth noting that Schneider's target of $6,200 is a significant upward revision from his forecast a month ago. Back on January 5th, he believed gold prices would reach $5,000 by the end of the first quarter. Now, with all the positive factors further confirmed, UBS not only maintains its "attractive" rating on gold but also considers it an indispensable cornerstone in a diversified investment portfolio. Analysts suggest that investors with a strong affinity for gold should allocate a mid-single-digit percentage to their overall portfolio; this proportion effectively hedges against various market and economic risks without excessive concentration.
In summary, the three forces of Federal Reserve easing, geopolitical instability, and a mismatch between supply and demand have resonated perfectly, creating a super-favorable environment for the continued rise in gold prices. UBS's latest research report not only points the way for the market but also sends a clear signal to all investors: in global asset allocation in 2026, gold may become the most dazzling gold.
Whether you are a long-term investor or a short-term trader, now is the perfect time to reassess your gold portfolio – because a historic gold bull market has quietly begun.
At 09:14 Beijing time, spot gold was trading at $5184.75 per ounce.
As geopolitical storms continue to escalate, gold's safe-haven appeal is fully activated.
UBS points out that gold's reaction to recent geopolitical tensions around Iran has remained relatively restrained, but this precisely implies significant upside potential. The US military deployment in the region has reached an unprecedented scale—two aircraft carriers, a large number of fighter jets, and refueling aircraft are simultaneously assembled, exceeding even the levels seen before Trump's actions against Venezuela earlier this year. Analysts emphasize that the likelihood of military action against Iran in the short term is significantly increasing, and Trump's consistent diplomatic style suggests that geopolitical uncertainty is unlikely to subside in the near future.
While historical experience shows that geopolitical events typically do not have long-term structural impacts on global markets, they often trigger sharp short-term spikes in volatility. In such an environment, investor demand for classic safe-haven assets like gold is rapidly ignited. UBS believes that it is precisely this persistently high level of geopolitical risk that provides a solid foundation for gold prices, allowing them to continue to shine amidst market turmoil.
The Fed's easing cycle is far from over, and the macroeconomic environment is favorable for gold.
Meanwhile, the Federal Reserve's shift in monetary policy has become another major engine for gold price increases. UBS analysts explicitly stated that a weaker dollar and lower US real interest rates are the most direct positive factors for gold, and the current macroeconomic environment is expected to maintain this trend. Even with recent strong US employment data and some hawkish comments in the latest Fed meeting minutes, inflationary pressures are expected to gradually ease in the coming months. Furthermore, the Fed's personnel structure is expected to be more dovish later this year, all of which point to further room for interest rate cuts.
UBS specifically predicts that the Federal Reserve will implement two 25-basis-point rate cuts by the end of September 2026. This easing path will not only continue to suppress real interest rates but also weaken the dollar exchange rate, thus providing a continuous upward momentum for gold prices. Analysts emphasize that the Fed's easing cycle still has considerable room for maneuver, meaning that the macroeconomic support environment for gold will remain intact in the coming months.
A surge in demand coupled with stagnant supply has led to a super tight balance in gold's fundamentals.
Demand has also seen explosive growth. According to data from the World Gold Council, global gold demand surpassed 5,000 tons for the first time in 2025, and UBS predicts this figure will continue to climb in 2026. The driving forces are mainly threefold: first, a significant recovery in investment demand; second, central banks maintaining a strong pace of gold purchases; and third, long-term structural demand for gold jewelry driven by rising incomes among Asian residents.
In stark contrast to demand, gold supply has stagnated for a long period. UBS, citing data from Wood Mackenzie, points out that while high gold prices may stimulate some mines to explore and expand production, as many as 80 mines will face the prospect of exhausting their current production plans by 2028. This supply-demand imbalance will lay the most solid fundamental foundation for a long-term rise in gold prices.
UBS's chief expert recently stated that gold remains the strongest hedging asset in 2026.
On February 16, Dominic Schneider, Chief Investment Officer for Commodities and Asia Pacific FX at UBS Wealth Management, further reinforced this view. He stated that as recent market volatility gradually subsides, the fundamentals for gold and other key commodities remain strong. Schneider predicts that gold could reach a high of $6,200 per ounce, supported by central bank purchases, investor demand, large fiscal deficits, lower US real interest rates, and geopolitical risks.
Schneider specifically advised that investors who have not yet allocated gold should establish a position as soon as possible, while those who already hold a significant amount of gold and have realized substantial unrealized profits can diversify some of their holdings into other commodities such as copper, aluminum, and agricultural products to further optimize the risk-return structure of their portfolios. He emphasized that in 2026, commodities will play a far more important role in global investment portfolios than ever before, especially against the backdrop of supply and demand imbalances, geopolitical risks, and energy transition, where gold's value as a core hedging tool will become increasingly prominent.
Forecasts have been significantly revised upwards; the gold bull market is far from over.
It's worth noting that Schneider's target of $6,200 is a significant upward revision from his forecast a month ago. Back on January 5th, he believed gold prices would reach $5,000 by the end of the first quarter. Now, with all the positive factors further confirmed, UBS not only maintains its "attractive" rating on gold but also considers it an indispensable cornerstone in a diversified investment portfolio. Analysts suggest that investors with a strong affinity for gold should allocate a mid-single-digit percentage to their overall portfolio; this proportion effectively hedges against various market and economic risks without excessive concentration.
In summary, the three forces of Federal Reserve easing, geopolitical instability, and a mismatch between supply and demand have resonated perfectly, creating a super-favorable environment for the continued rise in gold prices. UBS's latest research report not only points the way for the market but also sends a clear signal to all investors: in global asset allocation in 2026, gold may become the most dazzling gold.
Whether you are a long-term investor or a short-term trader, now is the perfect time to reassess your gold portfolio – because a historic gold bull market has quietly begun.
At 09:14 Beijing time, spot gold was trading at $5184.75 per ounce.
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