Gold Rally Shows No Signs of Slowing, UBS Raises Price Target to $3,200

Gold Price Today: There’s no stopping the gold rally. The metal continues to hit new peaks, with commodity analysts expecting more upside ahead. So far this year, gold has delivered a robust performance, surging nearly 15% and outpacing every other asset class. In contrast, global equity markets have shown moderate gains, with the US markets briefly entering correction territory before recovering.

Domestic benchmark indices— Sensex and Nifty— have tumbled by around 5% this year, weighed down by geopolitical uncertainty owing to Trump’s tariff moves. Meanwhile, aggressive gold buying by global central banks has also sent the price levels of the yellow metal soaring.

What's adding to the optimism is Trump's policy flip-flip over tariffs. The US administration announced a 1-month-delay on the imposition of import tariffs on its neighbouring nations, Canada and China. These sudden changes are making the already uncertain outlook even more difficult to gauge, eventually making investors more risk-averse.

"Gold prices surged to new highs above Rs 88,000 in Multicommodity Exchange, supported by Comex gold crossing the $3,000 mark. The rally is fueled by continued US tariffs on various products across multiple countries, with the latest focus on European goods like alcohol and cognac. These tariff concerns are keeping market participants cautious, driving sustained gold buying," said Jateen Trivedi, VP research analyst - commodity and currency, LKP Securities.

Analysts Bullish on Gold

After crossing the Rs 88,000 mark per 10 grams, gold saw a brief round of profit booking—similar to what happened after it hit a new peak on Monday. According to the GoodReturns website, the price of 24-carat gold experienced a slight decline on Tuesday, with ten grams of the yellow metal trading at Rs 89,700.

However, analysts remain bullish on the commodity. UBS has already raised its price forecast for gold to $3,200 an ounce as demand for safe-haven assets continues to surge due to the escalation of trade wars. Trump's reciprocal tariff stance and global central banks accumulating the commodity will push the price of the yellow commodity even further this year.

"(Gold) will also benefit from a worsening outlook for the US economy, with traders now pricing in additional interest rate cuts by the Federal Reserve as concerns about a recession rise," the Swiss Bank reportedly said in a note.

Before this, Macquarie Group also took a similar stance and stated that gold price could soar to $3,500 an ounce within this year. “We view gold’s price strength to date, and our expectation for it to continue, as primarily being driven by investors’, and official institutions’, greater willingness to pay for its lack of credit or counterparty risk,” the financial institution said.

What’s Next for Gold Prices?

"This week, key events such as US retail sales data and the Fed’s policy meeting and statement will be crucial in determining the next move for gold. The price range has shifted higher to Rs 87,250–Rs 88,650," said Trivedi.

On an annual basis, the price of the yellow metal has surged by over 33%, outpacing the equity market returns. So far, this month, Gold prices have increased by over 3.4%.