UBS strategist Giovanni Staunovo warns that gold may revisit support near USD 4,000 an ounce in the near term, but he expects entrenched buyers to prevent a deeper slide in prices.
In a note issued on Friday, Staunovo attributed recent declines in the metal to rising U.S. real yields and a stronger dollar, factors that increase the opportunity cost of holding non-yielding assets such as gold. "Still, we think gold has proved notably resilient to the sharp rise in yields," he wrote.
UBS highlighted that gold's sensitivity to changes in real rates has lessened, suggesting that structural sources of demand are offsetting some of the pressure from higher yields. The bank pointed to a series of underlying drivers: central banks diversifying reserves, concerns about rising public debt and debt-servicing costs, an expectation that the dollar will weaken over time, and continued strong buying from China.
Preliminary data for September showed central bank purchases maintaining a solid pace, according to UBS. The bank reiterated its outlook that annual central bank buying should remain in the range of 750 to 1,000 metric tons.
"In the near term, gold may retest support around USD 4,000/oz, where we expect structural dip buyers to establish a floor," Staunovo said, signaling that pullbacks could attract longer-term investors and official-sector purchasers.
UBS expects that as markets reassess the potential for further Federal Reserve tightening, real yields could move lower, which would be supportive of higher gold prices. The bank projects a stabilization in the market and a resumption of an upward trend toward the end of the year and into 2027.
"Overall, we believe the long-term investment case for gold remains positive," Staunovo added. "In our view, price pullbacks toward USD 4,000/oz offer opportunities to add exposure."
This view frames gold's near-term downside as limited by structural demand, while leaving the market sensitive to the trajectory of real yields, the dollar, and central bank activity.