Goldman Sachs, UBS forecast strong gold prices going ahead amid global uncertainties

Goldman Sachs and UBS Group AG have issued optimistic forecasts for gold, underscoring the metal's importance as a haven in uncertain economic times. The banks have highlighted strong central bank demand and the metal's capacity to hedge against geopolitical risks and economic downturns as key drivers for their projections. 

Goldman Sachs analysts foresee gold prices reaching $3,700 an ounce by year's end and climbing to $4,000 by mid-2026. UBS forecasts a price of $3,500 an ounce by December 2025. Recent trends have shown a 6.6% surge in gold prices, setting a new record above $3,245 an ounce.

Gold's role as a hedge against inflation and currency fluctuations is reinforced by its rising demand among central banks and various investors. Goldman Sachs anticipates official-sector gold purchases will average 80 tons monthly this year, an increase from previous estimates. UBS expects robust demand from central banks, asset managers, macro funds, and private investors, driven by global trade tensions and geopolitical instability. 

The strategic allocation of gold in investment portfolios is advised by experts to mitigate risks during economic volatility. Achin Goel of Bonanza recommends a portfolio composition for individuals in the 30–40 age group that includes 10% gold, alongside 70% equities and 20% debt. He told the Economic Times: “This allocation allows you to take advantage of growth from equities while maintaining stability through debt, and risk protection with gold. Especially in volatile years like this one, having 10% in gold adds an important cushion to your portfolio.” Such a strategy aims to balance growth potential with risk mitigation. 

Technical indicators also highlight gold's strong momentum, with prices reaching lifetime highs on the MCX despite a strong rupee. Jateen Trivedi of LKP Securities observes that ongoing geopolitical tensions and US-China tariff conflicts have driven a surge in safe-haven demand for gold. “Despite rupee strength, the ongoing geopolitical tensions and US-China tariff battles have fuelled a surge in safe-haven demand,” Trivedi says. “Bullish sentiment is dominating, with the next resistance seen at Rs 94,500–Rs95,000, while ₹92,000 acts as a strong support.” This technical outlook complements the growing strategic interest in gold. 

Gold's attractiveness during times of market instability is underscored by its historical reputation as a reliable store of value. As global markets grapple with uncertainties, the yellow metal is seen as a flexible hedge rather than a consistent top performer. 

Kunal Vora of White Whale Partners noted: “Gold is a hedge against inflation, the US dollar, and uncertainty. All of these concerns are heightened currently, thus the case for gold is extremely strong.” 

Gold has experienced a recent surge, particularly leading up to policy changes and geopolitical concerns related to President Trump's announcements. However, once these concerns subside, so too will the price of gold. It is advisable to approach gold as a responsive hedge rather than a consistently strong performer. Investors are encouraged to consider incorporating it into their portfolios as a stabilizing asset amid fluctuating market conditions.