• UBS raises 2025 gold forecast to $3,800 amid rate cut bets
• Gold hits $3,643/oz; silver tops $40 for first time since 2011
• Central bank buying, weaker dollar fuel precious metals rally

Swiss bank UBS now forecasts gold prices to reach $3,800 an ounce by the end of 2025, up from its previous target of $3,500. The updated forecast, reported on Friday, September 12, is based partly on expected changes in U.S. monetary policy. It is slightly more bullish than the $3,700 an ounce projection from Goldman Sachs for the same period.

Looking further ahead, UBS anticipates prices will continue to rise, reaching $3,900 an ounce by mid-2026, an increase from its earlier forecast of $3,700. Goldman Sachs is more optimistic for that timeframe, predicting a price of $4,000 an ounce. These forecasts reflect broad optimism in the gold market, with ANZ Group also targeting $3,800 an ounce by the end of 2025 and $4,000 by June 2026.

Collectively, these financial institutions are betting on the prospect of interest rate cuts by the U.S. Federal Reserve. Gold tends to become more attractive with lower rates, which also weaken the U.S. dollar. Other factors, such as continued purchases by central banks and global geopolitical tensions, are also contributing to the metal's appeal.

Gold prices are already benefiting from these market conditions, having surged more than 35% since January. The price surpassed the $3,600 per ounce threshold for the first time last week, trading at $3,643 an ounce on Sunday, September 14, according to the World Gold Council. The Federal Reserve is expected to provide an update on the U.S. economy after the next meeting of its Federal Open Market Committee, scheduled for Tuesday, September 16, to Wednesday, September 17.

It is worth noting that gold is not the only precious metal profiting from the economic climate in the U.S. Silver also surged past the $40 per ounce mark for the first time since 2011 this month, outperforming gold for the year as a whole.

Aurel Sèdjro Houenou