Overview of the Precious Metals Market
On Monday, precious metals experienced a downturn, with silver taking the lead in decline after surpassing $80 per ounce at the start of trading. Gold also retreated from its historical highs, as investors took profits and geopolitical tensions eased the demand for safe-haven assets.
Silver Performance
Spot silver was down 4.6% to $75.47 per ounce, having fallen from its record high of $83.62 reached earlier in the session.
Tim Waterer, chief market analyst at KCM Trade, stated, “Profit-taking and reportedly productive conversations between Trump and Zelenskiy regarding a potential peace deal have pressured both gold and silver lower.”
Gold Price Forecast by UBS
Amidst this backdrop, UBS raised its gold price target to $5,000 per ounce for the first three quarters of 2026, anticipating a moderation to $4,800 per ounce by the end of 2026. This is an increase from their previous forecast of $4,300 per ounce.
The bank expects steady growth in gold demand until 2026, supported by lower real yields, ongoing global economic concerns, and uncertainty surrounding U.S. domestic policy, especially related to midterm elections and rising fiscal tensions.
“Should political or financial risks escalate, prices could rise to $5,400 per ounce (up from $4,900 per ounce),” UBS noted in their statement.
Key Questions and Answers
- What is causing the decline in precious metals? The downturn is attributed to profit-taking by investors and reduced demand for safe-haven assets due to easing geopolitical tensions. Additionally, reportedly productive talks between Trump and Zelenskiy regarding a potential peace deal have contributed to the decline.
- What is UBS’s revised gold price forecast? UBS has increased its gold price target to $5,000 per ounce for the first three quarters of 2026, followed by a moderation to $4,800 per ounce by the end of 2026. This is an upward adjustment from their previous forecast of $4,300 per ounce.
- What factors are driving gold demand according to UBS? Factors supporting steady growth in gold demand until 2026 include lower real yields, persistent global economic concerns, and uncertainty surrounding U.S. domestic policy—specifically midterm elections and rising fiscal tensions.
