Gold

18 August 2026, 07:10 UTC Chief Investment Office GWM Investment Research

Not the last spike in 2H CIO View: Gold Dominic Schnider, CFA, CAIA, Strategist, UBS Switzerland AG Giovanni Staunovo, Strategist, UBS Switzerland AG

Gold (USD/oz) • Gold has risen almost 10% this month, and we see higher prices Forecasts Spot ahead over the medium term as real US interest rates fall and 17 Aug 26 4,397 investment demand remains high. Dec 26 4,600 • We are extending our forecast horizon by one quarter and therefore 5,000 Mar 27 introduce the end-3Q27 gold at USD 5,400/oz. This forecast assumes that disinflation in 2027 will support a less restrictive US monetary Jun 27 5,200 policy stance, with the US dollar weakening broadly. Sep 27 5,400 Bloomberg, UBS; Note: Forecasts refer to end of • We do favor selling the downside price risks in gold, given our positive period. price outlook and still-decent option volatility levels. Price pullbacks to USD 4,000/oz offer opportunities to add gold exposure, in our view. Central bank net purchases have improved lately Values in metric tons With a lag, the gold price has risen in recent days as investors reassess the outlook for US monetary policy and the US dollar. Recent communication from the Federal Reserve has left the near-term path for interest rates uncertain. Softer US labor market data have also reinforced expectations that the Fed may be able to keep rates unchanged if inflation pressures remain contained.

Demand-related factors have provided additional support. Gold exchange- traded fund (ETF) inflows have resumed, initially driven by China and, more recently, by Europe. Meanwhile, central bank activity has remained solid. According to the World Gold Council, central bank net purchases reached 51 metric tons in June. In July, the People’s Bank of China (PBoC) increased Source: World Gold Council, UBS its gold reserves by 20 metric tons, the largest monthly increase since October 2023. Gold ETF flows by region In our view, three conditions would help gold extend its rally. First, US Values are in metric tons dollar weakness would need to persist. A decision by the Fed to keep rates unchanged in September is our base case, although uncertainty over additional rate hikes this year remains. Second, expected US real rates would need to decline. Real rates measure interest rates after adjusting for expected inflation. Higher real rates increase the opportunity cost of holding gold, which does not generate income. Although the relationship between real rates and gold is not stable across all periods, it remains an important driver to monitor. Third, investor demand for gold would need to strengthen further. ETF flows appear to be improving, although it is too early to conclude that inflows have become sustained. As a reference, our price framework indicates that investment demand of around 500 metric tons per quarter is likely needed for gold prices to trade more sustainably at or above USD 5,000/oz. Source: WGC, UBS

So where does that leave us with regard to our forecasts? We retain our year-end forecast of USD 4,600/oz. As the September forecast horizon

This report has been prepared by UBS Switzerland AG. Please see important disclaimers and disclosures that begin on page 3.

approaches, we introduce our end-September 2027 forecast of USD 5,400/ oz, which is USD 200/oz above our end-June 2027 forecast. This higher forecast reflects our view that disinflation could become a more prominent market theme next year. A more favorable base effect and other factors could reduce inflationary pressure. This would likely support assets that have been pressured by rising rate expectations, including gold. We also expect US economic activity to be at or below trend. If this occurs, it could weigh on the US dollar and support demand for gold.

From an investment perspective, our forecasts, together with elevated option volatility (above 20%), favor volatility-selling strategies, such as selling downside price risk in gold to generate additional yield. Our revised forecasts at the longer end of the forecast horizon also suggest that pullbacks should be viewed as buying opportunities. The principal risk to our…