UBS: The mid-term upward trend of gold remains unchanged. The target price for this year is expected to be $4675 per ounce.

UBS released a report stating that gold prices have stabilized and rebounded since the beginning of the week, leading to a roughly 20% increase in Hong Kong and mainland gold stocks in three days. The bank pointed out that investment sentiment in the gold market is gradually improving, mainly due to lower-than-expected US non-farm payroll and weak inflation data, as well as a continued decline in both CPI and PPI. In the previous months, the market has been constrained by escalating oil prices due to Middle East geopolitical conflicts, intensifying inflation expectations, and increasing concerns among investors about "sustaining higher interest rates for longer", which have been the main resistance to gold prices. It is worth noting that gold prices have been fluctuating around the $4000/ounce level recently, with buy orders coming in each time it tested that level. The recent trend in gold prices suggests that this level may be forming a support. The UBS global team remains optimistic about the medium-term outlook for gold, expecting prices to rise to $4675/ounce in 2026 and $4800/ounce in 2027. UBS gold strategist Joni Teves predicts that gold prices are likely to continue to rise from the current level by the end of this year. In his view, portfolio diversification remains a key driver of gold demand among a wider group of investors. As macro uncertainty remains high, he believes investors are seeking to build portfolios that can remain resilient in various outcome scenarios. This helps explain why despite the high opportunity cost of holding gold, demand for gold remains strong. Furthermore, Joni Teves stated that the trend of central banks diversifying their reserve assets remains unchanged, and official gold purchases will continue to provide a bottom support for gold prices. The latest data shows that during the consolidation period of gold prices around $4000 in June, the People's Bank of China increased its gold holdings.