Gold Price Projections Upgraded Amid Growing Trade War Fears and Central Bank Accumulations

Key financial institutions have significantly raised their gold price predictions, driven by heightened concerns over trade wars and the ongoing buying spree of gold by central banks.

This week, strategists at Citi and UBS revised their forecasts for gold, signaling continued bullish momentum for the precious metal as geopolitical risks and economic uncertainties pressurize global markets. Gold-backed digital assets like PAXG and XAUT have followed suit, showing performance closely aligned with gold’s recent price surge. These tokens, secured by physical gold stored in vaults, have outpaced the broader cryptocurrency market in response to growing market volatility.

Citi has adjusted its short-term target for gold to $3,000 per ounce, up from $2,800, with an updated yearly forecast of $2,900. The adjustment reflects both the trade war dynamics and the demand for a safe-haven asset, particularly as global economic concerns increase.

Meanwhile, UBS has raised its 12-month gold price target to $3,000 per ounce, surpassing its previous target of $2,850. Gold has already surpassed this level, trading at $2,860, representing a 9% gain year-to-date.

Mark Haefele, UBS’s Chief Investment Officer, emphasized in a note that gold’s continued status as a “reliable store of value and hedge against geopolitical risks” has proven itself once again. Similarly, Citi highlighted that the ongoing trade wars and geopolitical instability are fueling a trend of reserve diversification and de-dollarization, which in turn is driving up gold demand, particularly in emerging markets.

With the global outlook remaining uncertain, both Citi and UBS forecast that gold, along with gold-backed tokens, will continue to benefit from central bank purchases and increased investor demand for the precious metal.