The Swiss bank UBS predicted that the gold rally is not over.

According to UBS Group AG, gold is expected to rise to $2,900 per ounce by the end of next year, reiterating the call from Goldman Sachs Group Inc. for further gains as central banks increase their assets.

UBS analysts, including Levi Spry and Lachlan Shaw, stated in a note that there will likely be a consolidation period due to concerns about the strengthening dollar and the potential for higher interest rates before the precious metal begins to rise again, driven by additional U.S. fiscal stimulus. Analysts predicted that the bullion would rise further to $2,950 per ounce by the end of 2026.

Analysts said, "The Red Sweep in the U.S., strong diversification buying interest, and increasing global uncertainty will continue to support prices. Gains should be driven by ongoing strategic gold allocations and official sector purchases in an environment of high macro volatility and persistent geopolitical risks."

2024 GOLD YEAR

Gold has become one of the strongest performing commodities in 2024, breaking consecutive records before a pullback due to the rise of the dollar following the U.S. presidential elections. The progress recorded since the beginning of the year has been supported by central bank accumulation, the Federal Reserve's shift towards monetary expansion, and geopolitical tensions in Europe and the Middle East.

The spot price of gold is trading around $2,630 per ounce, marking a 28% increase this year.

GOLDMAN SACHS PREDICTED $3,000

Goldman Sachs predicted this week that the precious metal will climb to $3,000 per ounce by the end of next year. This bullish outlook was tied to strong demand from central banks and the flow into exchange-traded funds as the Fed raises interest rates.

UBS also indicated that monetary authorities are likely to make more purchases. UBS stated, "The official sector, which tends to buy physical gold bullion, is likely to continue adding to reserves for diversification purposes and due to geopolitical tensions and sanction risks. The percentage of gold reserves of many central banks remains small relative to their total assets."