The bullion has remained steady around $2,650/oz this week, constrained
by the strength of the US dollar, rising US Treasury yields, and improved risk
appetite for US equities.
Gold rose 28% since the start of the year, outperforming the S&P 500 equity
index.
In a note published Wednesday, UBS strategists highlighted several
catalysts expected to continue driving upside in gold prices next year.
Among those are central banks’ accumulation of gold, which UBS believes
will continue in 2025 as part of their diversification strategies.
Data from the International Monetary Fund (IMF) shows global central
banks’ net gold purchases in October were the highest monthly level
recorded this year. UBS has revised its forecast for official sector gold
purchases to 982 metric tons for 2024, up from a previous estimate of 900
metric tons.
While this figure is below the levels of the past two years, it represents a
substantial increase compared to the post-2011 average of around 500
metric tons. Strategists believe this trend will persist, stating,
«We think the strong buying momentum will continue amid de-dollarization
efforts and expect central banks to buy another 900mt of gold or more in
2025,” strategists led by Mark Haefele wrote in the note.
Investor demand for gold as a portfolio hedge is also likely to rise. Although
the policy agenda of US President-elect Donald Trump has been widely
discussed, uncertainties remain regarding fiscal, trade, and geopolitical
developments.
Coupled with ongoing conflicts in Ukraine and the Middle East, UBS
believes these factors will drive increased demand for safe-haven assets,
boosting inflows to gold exchange-traded funds.
Gold’s rally should continue in 2025, says UBS
