UBS strategists, in a note examining World Gold Council first-quarter data, reiterated a bullish long-term case for gold, projecting that prices could approach USD 5,900 per ounce by late 2026. The bank's team - Wayne Gordon, Giovanni Staunovo and Dominic Schnider - said structural demand trends remain intact despite increased volatility following the onset of the Iran War.
According to UBS's read of the WGC data, gold averaged USD 4,873 per ounce in the first quarter and rose above USD 5,500 at its peak before retreating. The bank said the composition of demand has shifted, with investment flows now the principal driver of purchases.
Bar and coin demand was a standout, increasing 42% to 474 metric tons, a rise that UBS attributed largely to Asian buyers. Central bank buying also nudged higher, up 3% to 244 metric tons. Exchange-traded funds remained net buyers on the quarter, adding 62 metric tons overall despite some late-quarter outflows, particularly in the U.S.
Jewelry consumption fell by 23% to 300 metric tons, though total expenditure on jewelry rose by more than 30%. UBS said it sustained its demand forecast for 2026 at 900 metric tons.
UBS cautioned that near-term gains could be constrained by elevated real yields and a firmer U.S. dollar that the bank links to the oil shock, describing recent price softening as temporary. The strategists noted several factors they expect to support renewed investment flows over time, writing:
"Uncertainty surrounding upcoming midterm elections and tariff negotiations, expectations of a weaker US dollar over time, and declining real interest rates (as the Fed cuts) will likely reinvigorate ETF inflows, alongside continued central bank demand."
The analysts added that together these drivers could push prices toward USD 5,900/oz by late 2026. UBS said it prefers adding long positions on pullbacks into the USD 4,400 - USD 4,600 per ounce range.
Taken together, the data and UBS's interpretation point to a market where investor appetite and official-sector purchases are the key support pillars, while jewelry demand and retail patterns show mixed performance across regions.
Market participants should weigh the bank's scenario against the stated near-term headwinds, particularly movements in real yields and the dollar, which UBS identifies as factors that could mute immediate upside.