UBS commodity analysts say that even though gold hasn’t done very well since the Iran war started, the new calculations of risk, interest rate policy, inflation, and strong underlying demand will still push the yellow metal as high as $6,200 per oz by the end of 2026.
Analysts wrote on Friday that gold hasn’t been able to break out above $5,200 an ounce since the conflict with Iran began, and that its supposed bid as a safe haven hasn’t come through. “This is different from its 65% rise last year, when higher geopolitical risks helped it rise along with fundamental drivers like lower real interest rates and worries about debt,” they said. “Its most recent performance is similar to what it has done in the past during these kinds of events, when investors look for cash and consider other options, such as energy assets.”
Some examples: “Gold prices went up 15% after the Russia-Ukraine conflict began in 2022, but then went down 15% to 18% when the Federal Reserve raised rates,” they wrote. “The same thing happened in the Gulf War and the Iraq War: prices went up at first, but they went down as tensions eased.”
The Swiss banking giant is still sure that gold will rise another 20% or more in 2026, even though the price of the yellow metal has been moving sideways lately.
“We still think that gold prices will rise this year to around USD 5,900 to 6,200 an ounce,” they said. “Gold is more of a hedge against the effects of wars on society as a whole than against direct threats of war.” Gold is mostly safe against monetary risks that come from geopolitical battles, such as currency devaluation, rising deficits, and economic slowdowns.
The experts agreed that higher energy prices and worries about inflation have made the US dollar stronger and caused people to worry about possible rate hikes, which are both bad for gold prices in the short term. “But we expect central banks to keep an eye on inflation risks and not raise interest rates without thinking it through first.”
Also, the longer the conflict between the US and Iran lasts, the more likely it is that the economy will suffer, which will likely increase the demand for gold as a hedge.
They said, “In the long run, gold stands out as a hedge against inflation.” “The Global Investment Returns Yearbook says that since 1900, the real returns on gold and commodities have been linked to inflation in a good way.”
UBS also said that there is still a strong market for gold. As the month began, ETF investors cut back on their gold holdings a little, but recently, their positions have become more stable, and hedge funds have slightly increased their net gold positions, the analysts noted. “Total gold demand is likely to stay high because central banks will continue to buy gold, investment activity will rise, and demand for gold jewelry will continue to grow as incomes rise in Asia.”
Gold will also continue to be popular because of structural trends. “Gold’s long-term outlook will be helped by structural trends like rising government debt and efforts by central banks and investors around the world to move away from the dollar,” they said. “Because of the macroeconomic and political uncertainty that goes beyond the risks from the conflict between the US and Iran, we continue to have a positive view on gold and think that the yellow metal is still a good way to diversify your portfolio.” Gold lovers could think about putting up to ten percent of their money into a diverse portfolio.
On February 23, UBS analysts said that gold would finally show the full effects of the ongoing political crisis in Iran. They also said that prices would rise an extra $1,000 per ounce by June, taking into account the Fed’s plan to lower interest rates and the rising demand in the market as a whole.
The analysts wrote, “Even though gold hasn’t changed much in response to the latest rise in geopolitical tensions, we think prices can rise even more.” “We think the price of the precious metal will reach USD 6,200/oz in the next few months because the main factors that have been supporting its strong rise are still in place.”
UBS said they think global risks will stay high. Analysts pointed out that the US military buildup in the area is now bigger than it was off the coast of Venezuela in the weeks before Trump removed Nicolas Maduro from office at the beginning of this year. This is because two aircraft carriers, fighter jets, and refueling ships are said to be stationed there. “A deal with Iran is still possible, but it looks more and more likely that military action will be taken against Iran soon.”
“Geopolitical uncertainty is not likely to go away in the near future because of how Trump handles foreign affairs,” they said. “Geopolitical events don’t usually have long-lasting effects on global markets, but they can cause short-term increases in volatility that make people want to buy gold as a hedge for their investments.”
UBS said that the Fed’s plan to loosen monetary policy should also keep gold prices high. They said, “A weaker US dollar and lower US real interest rates are good for gold, and we think this macro environment will stay the same as long as the Federal Reserve keeps easing.” “Even though recent job data was better and the latest FOMC minutes had some “hawkish” points, inflation pressure should ease in the coming months and the Fed should hire more “dovish” people later this year, which should support more rate cuts.” By the end of September, we expect two 25-basis-point rate cuts.
Analysts also think that more people will want to buy gold in 2026. “Data from the World Gold Council showed that total gold demand surpassed 5,000 metric tons for the first time in 2025,” they said. “We expect demand to pick up even more, helped by more investments and strong central bank purchases.” “Asia’s higher incomes should also support gold jewelry demand over the long term.” On the other hand, supply has stayed the same. Strong gold prices may encourage mine exploration and growth, but Wood Mackenzie predicts that 80 mines will reach the end of their current production plans by 2028.
UBS said that all of this makes the situation very good for the price of gold to keep going up.
The analysts said, “We maintain our Attractive view on gold and see the yellow metal as a good way to diversify your portfolio and protect yourself against a variety of market and economic risks.” “Gold lovers could think about putting up to ten percent of their money into a diversified portfolio.”
Dominic Schnider, Head of Commodities & APAC Forex CIO at UBS Wealth Management, said on February 16 that gold and other key commodities will have strong foundations as volatility goes down.
As a “safe haven” against political, geopolitical, and economic uncertainty, precious metals prices went up in January, even though they were volatile. Schnider wrote this in a commodity report. He also said that copper prices hit a record high at the end of January before leveling off. On the other hand, he said that short-term supply problems in the U.S. and Kazakhstan, a weak dollar, and unrest in the Middle East all pushed up oil prices.
Schnider said that UBS still thinks the fundamentals for gold and other key commodities are strong, even though recent market volatility is still low.
He said, “We see gold starting to rise again and reaching as high as USD 6,200/oz by mid-year. This will be helped by demand from central banks and investors, big budget deficits, lower real US interest rates, and geopolitical risks.” “We expect more copper and aluminum supply shortages, which should keep prices high in the middle term. Long-term demand is supported by structural drivers like electrification.”
Schnider said that investors who don’t already have gold should add some, and investors who already have a lot of gold should think about adding other metals to their portfolios.
He wrote, “For investors who like gold, we think a modest allocation can improve diversification and protect against systemic risks.” “We think that adding copper, aluminum, and agricultural assets to investors’ holdings can help diversify their sources of future return if they have a lot of gold and a lot of unrealized profits in gold.”
Schnider said, “Commodities are going to play a bigger role in portfolios in 2026. They offer diversification in a time of supply-demand imbalances, geopolitical risks, and the global energy transition.” “We like having a lot of different types of commodities in our portfolio, and we still like gold as a hedge.”
When Schnider predicted that gold would cost $6,200 an ounce, it was a big jump from where he thought it would be just one month ago. His writing from January 5 said that buying by central banks, bigger budget deficits, lower U.S. interest rates, and ongoing global risks would push the price of gold to $5,000 by the end of the first quarter.
As of 2026, commodities will be more important in portfolios, Schnider wrote. “We see opportunities in copper, aluminum, and agriculture within the asset class. Gold, on the other hand, is still a good way to diversify your portfolio.”
He said that prices will likely stay high for many goods in 2026 because of low supply and rising demand. He also said that he thinks the gold rise will continue this year. “We think gold will go up even more because central banks are buying it, the US has a big budget deficit, real interest rates in the US are falling, and geopolitical risks are still high,” he said.
