UBS maintains bullish gold outlook despite tariff volatility and muted demand

Published 11/08/2025, 09:44
© Reuters

Investing.com - UBS has reaffirmed its bullish outlook on gold despite recent price volatility triggered by tariff-related news, according to a research note released Monday.

The investment bank expects higher gold prices ahead, citing anticipated rate cuts throughout the year as U.S. economic data softens. Near-term trading is likely to remain range-bound due to summer market conditions, with gold’s one-month implied volatility dropping significantly to approximately 15% from April highs of around 24%.

Physical gold markets in Asia have shown muted activity, attributed to both seasonal factors and elevated gold prices. Import volumes in key markets China and India declined throughout the second quarter, falling below last year’s levels, while jewelry demand dropped substantially in the first half of 2025—down 21% in India and 28% in China, according to World Gold Council data.

Chinese onshore gold prices have recently traded at a discount to global spot prices, with trading volumes decreasing. Gold prices in China have moved into discount territory compared to global spot rates, accompanied by easing trading volumes.

Despite weakness in traditional physical demand, overall consumer demand has shown resilience, declining only 3% year-over-year in Q2 and 8% in the first half of 2025, supported by stronger physical investment demand in Europe (up 114% year-over-year in H1) and Asia-Pacific (up 17% year-over-year in H1), which together account for approximately 68% of global consumer demand for gold bars and coins.

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