UBS sees lower real rates reviving gold demand, flags dips as buying chances

UBS is constructive on gold, saying falling real interest rates and a softer U.S. dollar should revive investment demand as the Fed is expected to hold rates through 2026 and then ease in 2027. The bank argues lower real yields reduce the opportunity cost of holding bullion and historically support inflows. UBS also sees structural dollar headwinds from large U.S. fiscal and external deficits, while noting central bank buying remains an important stabilizer. Central banks reportedly bought about 290 metric tons in Q2, and UBS expects 750-1,000 metric tons for the full year. The bank views any pullback toward $4,000 an ounce or below as a buying opportunity, signaling a medium-term bullish stance despite possible near-term choppiness.