UBS Predicts Gold to Reach $4,000 per Ounce Amid Rising Futures

On September 5th, a prominent international financial institution predicted that gold prices could reach as high as $4,000 per ounce, signaling the start of a new upward trend for the precious metal. This comes as gold futures on the New York Mercantile Exchange have consistently hit new record highs.

Gold futures traded on the futures market hit $3,640.10 per ounce on September 3rd, marking a 36 percent increase in global gold prices this year. Despite these significant gains, market analysts remain optimistic about gold’s future prospects.

The firm reaffirmed its earlier forecast, suggesting that gold could reach $3,700 per ounce by June 2026. They also indicated that if geopolitical or economic conditions worsen, prices might soar to $4,000 an ounce.

Another major bank recently increased its forecast for the coming three months, boosting its expected gold price to $3,500 per ounce from $3,300. They also expanded the anticipated trading range to between $3,300 and $3,600, up from previous estimates of $3,100 to $3,500.

A different financial giant has maintained its year-end target at $3,700 per ounce, citing factors such as central bank gold purchases, recession risks, and concerns over the sustainability of the US dollar’s creditworthiness.

The average net value of 20 gold exchange-traded funds (ETFs) has surged roughly 42 percent this year, according to data from a financial information provider. Among these, 14 ETFs that track China’s spot gold prices returned an average of 31 percent over the past year, while the remaining six, linked to gold mining stocks, performed even better with an average growth of 66 percent.

With substantial capital flow into these funds, the total assets under management in gold ETFs have more than doubled since the start of the year, reaching approximately CNY 160.3 billion (around USD 22.4 billion).

In the first half of the year, the largest holders of gold ETFs were the fund companies themselves, which invested their own capital. For instance, Guotai Gold ETF’s holdings are 88 percent self-purchased, while Bosera Gold ETF’s holdings are 85 percent.

A market analyst commented, “Investors are pouring money into gold ETFs partly due to the safe-haven appeal and partly in response to ongoing global economic uncertainty.” The analyst also warned that, although gold holds long-term value, investors should remain cautious of the risks associated with high premiums and potential volatility.

The analyst noted that while increasing allocations to gold through ETFs is common, the market should stay vigilant for rapid fluctuations in gold prices, which could threaten short-term gains.