Gold surged to record highs above $5,500 an ounce earlier in 2026. Then the war-driven inflation trade started doing something unexpected: pushing rates higher instead of lower. UBS just updated its targets to reflect what that means for the metal through the end of the year.
The short-term number dropped. The long-term case stayed intact. The reasoning behind both is key for investors.
Why UBS cut its gold price target
UBS cut its near-term gold price target to $5,200 per ounce by June 2026, down from the prior spot price of approximately $5,344, according to Exchange Rates. The bank cited three specific pressures: a stronger U.S. dollar, rising oil prices, and a shift in rate expectations that has pushed real yields higher.
The long-term target remains $5,900 by end of 2026. UBS’s full range spans a $7,200 upside scenario if geopolitical tensions escalate further, and a $4,600 downside case if the Federal Reserve moves more aggressively on rates.
UBS put its view plainly. “While higher real yields and a stronger USD may cap near-term gains, we view recent weakness as temporary rather than a structural shift,” the bank said, Exchange Rates confirmed.
Why a war-driven inflation outlook is now cutting against gold
The paradox at the center of this reset is that the same force driving gold higher, war-related supply disruption and geopolitical fear, is now creating a headwind for the metal.
The Iran war has kept energy prices elevated and pushed March CPI to 3.3%, the highest reading since May 2024. Q4 2026 GDP came in at just 0.5%, according to Gold Silver. The stagflation backdrop is now confirmed by hard data.
More Gold & Silver
- Bank of America has stark message for Silver investors
- State Street declares gold must-hold asset
- How much gold you should hold in your retirement portfolio
In a normal environment, that combination would be unambiguously bullish for gold. Slow growth, high inflation, and geopolitical risk all point toward defensive assets.
But the war-driven inflation narrative has also forced markets to reprice rate expectations upward. Fed officials including Christopher Waller and Fed Chair Kevin Warsh have struck hawkish tones. The possibility of a rate hike by late 2026 is now actively priced in, according to Exchange Rates.
When rates rise, the opportunity cost of holding a non-yielding asset like gold increases. That is the mechanism squeezing the near-term target lower.
What the structural case for gold still looks like
UBS is not abandoning its gold thesis. It is recalibrating the timeline.
The structural drivers remain intact: central bank diversification, stagflation risks, geopolitical uncertainty, and eroding confidence in fiat currencies. Poland recently raised its gold holding target to 700 metric tons from 550 metric tons, a shift UBS highlighted as significant because it suggests reduced price sensitivity from one of the market’s largest buyers.
In China, physical demand has remained resilient despite record prices. UBS expects demand to moderate after Lunar New Year seasonal factors fade, but the broader buying trend from central banks globally remains intact. The bank expects official-sector purchases of approximately 950 metric tons in 2026.
UBS views the current weakness as a consolidation phase, not a structural break. The longer the war drags on, the greater the risk of negative economic impacts that would ultimately support gold, even if rates stay elevated.
Oliver/Getty Images
Where other major banks stand on gold for the rest of 2026
UBS is not alone in recalibrating. Several major institutions have updated their gold targets in recent weeks, and the range of outcomes is unusually wide.
Goldman Sachs lifted its year-end gold target to $5,400 per ounce. Deutsche Bank raised its target to $6,000. ANZ raised its Q2 forecast to $5,800.
JPMorgan sketched an upside scenario of $8,000 to $8,500 if private allocations continue rising.
The spread between these targets reflects genuine disagreement about the rate path and the durability of war-driven demand. UBS’s $5,900 year-end target sits in the middle of the institutional range, reflecting a measured view that gold will recover as the rate environment becomes clearer.
Key figures from UBS’s updated gold outlook:
- Near-term target: $5,200 per ounce by June 2026, down from spot of approximately $5,344; pressures cited include stronger USD, rising oil, and higher real yields, reported Exchange Rates.
- Year-end target: $5,900 per ounce by end of 2026; upside scenario $7,200; downside case $4,600 on more hawkish Fed, Investing.com noted.
- Macro backdrop: March CPI at 3.3%, highest since May 2024; Q4 GDP 0.5%; stagflation conditions confirmed, according to Gold Silver.
- Central bank demand: UBS expects 950 metric tons of official-sector purchases in 2026; Poland raised its gold target to 700 metric tons from 550, Investing.com confirmed.
- Gold performance: Surged above $5,500 earlier in 2026, up more than 25% year-to-date; currently trading around $4,562 after correction, Exchange Rates confirmed.
- Peer targets: Goldman Sachs $5,400; Deutsche Bank $6,000; JPMorgan upside scenario $8,000-$8,500; ANZ Q2 target $5,800.
- Prior UBS targets: $6,200 for March, June, and September 2026 before this latest revision.
What investors should watch for the remainder of 2026
The key variable is real yields. If the Fed signals a pause or a cut, real yields fall and gold’s near-term ceiling lifts.
If inflation stays sticky and the hawkish tone from Waller and Warsh translates into action, real yields rise further and the $5,200 near-term target may prove optimistic.
The war’s duration is the second variable. A prolonged conflict keeps energy prices elevated, sustains inflation, and maintains the geopolitical risk premium in gold. A resolution or ceasefire would likely see the risk premium unwind quickly, testing the structural demand case harder.
UBS’s framing is ultimately about sequencing. The near-term pain from higher yields is real. The long-term case from stagflation, central bank buying, and eroding confidence in fiat assets is equally real.
The $5,900 year-end target assumes the structural case wins as the year progresses. Whether that plays out depends on a Federal Reserve caught between slowing growth and persistent inflation.
Related: Popular Swiss Bank resets gold price target for the rest of 2026
