The bank pointed to US President Donald Trump’s plan to impose both broad reciprocal tariffs and additional sector-specific tariffs on April 2 as a looming risk event that could spur ongoing haven demand across markets. Gold — which breached the key psychological threshold of US$3,000 an ounce for the first time ever on Friday — 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.
UBS Group became the latest bank to raise its price outlook for gold on increasing chances of a protracted global trade war — a scenario that analysts expect will continue to drive investors to scoop up more of the ultimate haven asset.
Bullion is set to trade at US$3,200 an ounce in the next four quarters — an upward revision from the bank’s previous long-held forecast of US$3,000 — with an escalating trade conflict underscoring the precious metal’s role as a store of value in uncertain times, analysts including Wayne Gordon and Giovanni Staunovo, said in a note on Monday.
