GOLD prices are expected to trend higher, with a target of US$5,600 per troy ounce by the end of 2026 (US$1=RM3.92), amid prolonged geopolitical conflict in West Asia, persistent macroeconomic uncertainty and continued strong central bank demand.
UBS Investment Bank precious metals strategist Joni Teves said the underlying drivers supporting gold prices remained intact despite recent market consolidation, with diversification demand from institutional, retail and official sector investors continuing to underpin the precious metal’s momentum.
“We have maintained our bullish outlook on gold, as we still think that prices can recover from current levels and continue to make new highs this year,” Teves said during a virtual media call today with Bernama.
She said the higher oil prices due to the West Asia conflict were creating growing upside risks to medium- and long-term gold price forecasts.
Besides, a weaker global growth environment combined with a more dovish United States Federal Reserve could prolong gold’s bull cycle over the next few years.
Teves said the market would be watching for key factors on how the inflation-growth mix evolves, particularly in the second half of the year, as investors assess the economic impact of elevated energy prices.
She further said that if the outlook increasingly compressed real interest rates, driven by rising inflation, while nominal yields remained flat, this would provide a supportive backdrop for gold prices.
Therefore, she said the current period of consolidation in gold prices could present investors with an opportunity to build positions as a hedge against weaker real rates.
On central bank demand, Teves opined that official institutions might not reduce gold holdings following recent market volatility, noting the broader trend of reserve diversification into gold was likely to continue.
Meanwhile, she said physical demand for gold also remained supportive, particularly in Asia, where investment demand had offset weaker jewellery purchases amid record-high prices.
Teves said sentiment in China remained positive, with strong demand recorded especially in the first quarter of the year.
On silver, she said UBS also expected a positive outlook, with a target reaching above US$100 per troy ounce by year-end, tracking the trends in the gold market.
“We expect interest in silver to be more tactical, in contrast to more strategic positions in gold.
“Robust physical demand from China, where restocking and physical investment flows have room to continue, should also help support global investor sentiment,” she said.
However, she added that silver could underperform gold if slowing economic growth weakened industrial demand. – May 12, 2026
