UBS hikes gold price forecasts to $3,000

Gold bars

UBS hiked their gold price forecasts, predicting the precious metal to hit new records in the near term, driven by persistent uncertainty about the US trade policies, continued monetary easing cycle globally, and strong demand for safe-haven assets.

In a Friday note, the Swiss bank raised its gold forecasts to $3,000 per ounce over the next 12 months, CNBC reported.

"Our base case remains that significant tariffs against Canada and Mexico are unlikely to be sustained for a prolonged period, and that the ratcheting up of the US's effective tariff rate on China to 30% will be gradual," UBS wrote.

"But, we also believe gold will continue to be supported throughout the year by elevated uncertainty, an extension of the global rate-cutting cycle, and strong investor and central bank demand."

"Direct exposure to the metal may dampen risk in portfolios," the bank added.

"Equities linked to gold (such as gold miners) may offer greater capital gains potential but are likely to be more volatile and act like equities in times of risk aversion," the note said.