Gold prices could reach 5,000 USD/ounce in the third quarter of 2026, and in the scenario of political or economic instability surrounding the escalating US midterm elections, this precious metal could even rise to 5,400 USD/ounce. This is the assessment of commodity strategists at UBS - a Swiss multinational financial and banking group, among the largest in the world.
In a newly released report, the Swiss bank said it has raised its gold price target to 5,000 USD/ounce for the first three quarters of 2026. After that, UBS forecasts that gold prices will adjust to 4,800 USD/ounce by the end of 2026 - 500 USD higher than the previous forecast of 4,300 USD/ounce.
UBS believes that gold demand will increase steadily in 2026, supported by low real interest rates, prolonged global economic concerns, and domestic policy instability in the US - especially related to midterm elections and increased fiscal pressure.
If political or financial risks increase, gold prices could climb to 5,400 USD/ounce (previously forecast at 4,900 USD/ounce)" - UBS strategists wrote.
On November 27, UBS said that gold demand will continue to increase sharply in the coming time, thanks to interest rate cuts, reduced bond yields, fiscal challenges, and political instability in the US.
Gold prices have recently partially recovered from the decline from the end of October and we expect increased demand to continue to support upward prices" - UBS's Chief Investment Officer said. "The fact that the US Federal Reserve (Fed) continues to lower interest rates, lower real interest rates, increased fiscal risks, and changes in the US domestic political environment will prolong the strong buying trend of central banks and investors.
Previously, on November 20, UBS raised the gold price target for mid-2026 to 4,500 USD/ounce, from 4,200 USD/ounce. The bank also raised the scenario for a sharp increase to 4,900 USD/ounce if political and financial risks erupt, while maintaining the downward scenario at 3,700 USD/ounce.
According to UBS, the worsening US fiscal outlook will continue to support gold buying activities by central banks and investors, and forecast that capital flows into gold ETF funds will remain strong in 2026.
In the opposite direction, UBS warned of the risk of the Fed returning to a "hawkish" stance and the possibility of central banks selling gold remaining major challenges for the price increase scenario.
On November 3rd, UBS assessed that the gold market's correction was only temporary, with a scenario of price increases driven by geopolitical risks or increased market fluctuations.
The long-awaited adjustment has temporarily stopped" - UBS wrote in a research note. "Besides technical factors, we do not see any fundamental reason for this sell-off.
UBS also noted that the downward momentum of price dynamics has triggered the second downward wave of open positions in the futures contract market, but emphasized that fundamental demand is still very strong.
Analysts citing the World Gold Council's Q3 Gold Demand Trend Report show that buying activity is very strong and is accelerating from both central banks and individual investors.
The central bank has purchased 634 tons of gold this year - slower than last year but is accelerating in the fourth quarter, consistent with the forecast of 900-950 tons for 2025" - UBS said.
Capital inflows into ETFs reached 222 tons, along with demand for gold bars and coins over 300 tons in the fourth consecutive quarter, showing that investment sentiment is clearly improving. "The demand for jewelry is not as weak as concerns" - UBS commented.
We prefer the buying strategy when prices adjust" - UBS said, while assessing that investors are still not allocating enough to gold. The bank recommends that the proportion of gold be at an average of one digit in the investment portfolio.
