Gold has regained momentum, climbing towards $4,500 an ounce amid changing macroeconomic expectations, with UBS forecasting a potential return to $5,000 in 2027 as central banks and investors display renewed confidence.
Gold has regained momentum after a sharp sell-off earlier this year, with prices climbing back to about $4,400 an ounce in August after falling below $4,000 in July. Analysts at UBS have gone further, forecasting a return to $5,000 in the first half of 2027, a reminder that the metal remains highly sensitive to shifts in macroeconomic expectations.
The latest rebound appears to be driven less by any single market event than by a broader change in the outlook for interest rates and the dollar. Investors have become less convinced that the Federal Reserve will lift rates again in September after a weaker July jobs report, and that matters because gold does not pay income. When bond yields ease, the cost of holding bullion becomes less onerous. A softer dollar has also helped, making the metal cheaper for overseas buyers.
Recent commentary has added another layer to the story. Axios reported on 13 August that gold had risen to $4,465 an ounce, its highest level in more than two months, after the Fed delivered a dovish surprise at its late-July meeting. The same report said China bought nearly 20 metric tonnes of gold in July, its largest monthly purchase since October 2023, underlining the role central banks continue to play in supporting demand.
That official buying reflects a longer trend that gathered pace after Russia’s invasion of Ukraine in 2022, when the freezing of Russian foreign-exchange reserves reinforced the appeal of gold as a reserve asset outside the dollar system. The World Gold Council has also noted that stronger Treasury yields and a firmer dollar weighed on the metal at points in 2023, but the current backdrop is more favourable. For investors seeking exposure, exchange-traded funds such as SPDR Gold Shares and iShares Gold Trust remain the simplest ways to hold bullion without buying and storing the metal directly.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
