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Investing.com - Gold has emerged as the top-performing asset class of 2025, rising 29% year-to-date and outpacing major equity indices, bonds, G10 currencies, and bitcoin, according to a report released by UBS on Tuesday.
UBS maintains an "Attractive" rating on gold in its global preferences, noting that hedges remain highly relevant as market participants continue to alternate between fear and greed. The investment bank has set a price target of USD 3,500/oz for the precious metal.
The World Gold Council’s second-quarter demand data shows a modest slowdown in central bank purchasing, though its recent survey indicates 43% of reserve managers plan to increase their gold holdings over the next year, up from 29% in the 2024 survey. Investment demand has compensated for this slowdown, with strong buying observed in both ETFs and the bar and coin segment.
De-dollarization trends, sanctions concerns, and questions regarding Federal Reserve independence are contributing factors to gold’s strong performance, alongside ongoing geopolitical and macroeconomic risks. These elements form the foundation of UBS’s bullish price forecast.
UBS recommends mid-single-digit percentage allocations to gold for optimal portfolio diversification, particularly for investors with an affinity for the precious metal.
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