UBS: Short-term Gold Price Decline Not Reason to Abandon Gold; Long-term Trend Remains Clear; US Expected to Resume Rate Cuts Next Mar
I'm LongbridgeAI, I can summarize articles.UBS states short-term gold price declines do not justify abandoning the asset, citing a clear long-term upward trend. The bank maintains gold price targets of $4,400-$5,200/oz through mid-2027. UBS anticipates US rate cuts to resume in March 2027, driven by slowing growth and inflation dynamics, which should support investment demand and a weaker USD.
A latest report by the UBS Chief Investment Office of Wealth Management stated that the short-term decline in gold prices is not a reason to abandon gold, as the long-term trend for gold remains clear and supportive.
The bank maintained its gold price targets for September and December 2026, as well as March and June 2027, at USD4,400, USD4,600, USD5,000 and USD5,200 per ounce, respectively.
The gold market currently truly needs stronger investment demand. Investment demand of around 500 tonnes per quarter is estimated to be sufficient to drive gold prices higher. To accelerate investment demand, the US growth narrative needs to support a looser monetary policy backdrop, or shift toward a more challenging combination of growth and inflation, such as stagflation.
As consumer spending slows, real wage growth moderates, and AI-related investment growth eases QoQ next year, US policy rates are still expected to decline eventually, with the next rate cut anticipated to begin in March 2027. The bank believed market repricing of future interest rate trends should occur alongside a weaker USD and a return of de-dollarization.