UBS sees a 10% spike for gold this year as rate cut speculation swirls

Three 1kg gold bullion bars worth over 155,00 GBP lay on the counter in a gold dealers in Birmingham’s jewelry quarter on December 13, 2023 in Birmingham, England. Gold prices have increased since the Ukraine War but have soared to record highs since the start of the Hamas-Israel war. Other factors are the weakening US dollar and expected rate cuts from the Federal Reserve. 

Christopher Furlong | Getty Images

Gold prices could close the year as much as 10% above current levels on the back of potential interest rate cuts, UBS strategists said, despite declines at the start of 2024.

A UBS note on Friday described recent price moves as “minor” in the context of the precious metal’s 15% climb through 2023 and said the “power of the [Federal Reserve]’s policy pivot should not be underestimated.”

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