Gold Price Hits 23 Record Highs YTD; UBS Raised Target To $3,500-3,800; Why GO For GOLD?

Gold prices continued their unprecedented rally to hit at least 23 record highs in 2025 so far. On April 11, comex gold skyrocketed above $3,200 mark and touched its highest level of $3245.22, owing to weaker dollar. Following the latest performance, global brokerage UBS has raised its target for gold to $3,500, and further increased its upper base target to $3,800 due to tariff-related concerns and geopolitical tensions. The brokerage recommends to go for gold.

Gold Price:

After hitting a new record high, spot gold ended at $3236.6, up by 1.5%. The latest new record was fuelled by weaker US dollar and rising demand for safety following escalation in the US-China trade tensions.

As per Trading Economics data, China lifted its tariffs on the US to 125% as of April 12th and stated it will ignore further US responses after a series of increases in tariffs by the White House topped at 145%. The current measures are due to impact nearly $700 billion of goods exchanged between the world's largest economies every year, paring risk assets tied to global growth and supporting inflows into safety.

UBS Gold Target:

In its research report, UBS said, "The gold price has risen to nearly USD 3,240/oz, marking the 23rd record close for the year, with 10 April representing the largest one-day gain since April 2020. This rally is also due to how trade-related uncertainties are impacting trust in the US dollar and US Treasuries."

However, UBS also believes that there are certain factors that could cap gold's current strong rally. One of which is easing geopolitical tensions. Other key factors are a return to more cooperative trade relations, or a significant improvement in the US macro and fiscal backdrop.

Apart from safe-haven demand, UBS observes signs of more structural shift in gold allocations-for example, Beijing allowing insurance funds to invest in gold and central banks systematically raising gold's share of total reserves. This significantly supports demand, while supply is unlikely to respond much to higher prices.

Hence, UBS predicts central banks will buy around 1,000 metric tons in 2025 (up from 950 metric tons) after purchases of more than this level over the last three consecutive years. For ETFs, the reversal of the multi-year net-selling trend in mid-2024 will likely continue over 2025.

Accordingly, UBS has lifted its expectation for ETF net buying in 2025 to 450 metric tons (from 300 metric tons), alongside strong retail coin/bar demand.

But amidst ongoing tariff-related and geopolitical risks, which have negatively impacted US and global economic prospects, UBS said, "we are raising our gold price target to USD 3,500/oz across our forecast horizon and remain long the metal in our global and Asia asset allocation. We are also lifting our upside and downside targets by USD 300/oz to be USD 3,800/oz and USD 3,200/ oz, respectively. Over the longer term, our analysis shows that an around 5% allocation to gold within a USD balanced portfolio is optimal from a diversification standpoint."

Gold Prices In India:

Gold prices in India surged by over 3% in April so far, followed by over 6.1% gains in March, a nearly 3% climb in February, and more than 8.1% upside in January 2025. Despite, this week witnessing back-to-back new peaks, gold highest returns were seen in January 2025 in percentage terms.

At present, 10 grams in 24K is available at Rs 95,670 which is the new all-time high on Saturday, April 12. Further, 22K and 18K gold price stood at Rs 87,700 and Rs 71,760 per 10 grams, registering new lifetime high as well.

Meanwhile, MCX gold price ended at Rs 93,887 per 10 grams on April 11th, after hitting new historic high of Rs 93,940 per 10 grams during the trading session. Gold price surged by 18-19% year-to-date.

Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on article mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.