UBS: With the Fed's rate cuts and escalating geopolitical risks, gold prices will rise to $6,200

UBS reiterates its positive stance on gold, expecting the international spot gold target price to reach $6,200 per ounce in the coming months. Analysts believe that geopolitical risks will remain high amid tensions between the U.S. and Iran, while the Federal Reserve's easing cycle is expected to continue, putting pressure on real interest rates.

Analysts point out that global gold demand will exceed 5,000 tons by 2025. UBS expects that with stronger investment flows and continued purchases by central banks, gold prices will rise further. On the supply side, growth appears to be constrained.

While high gold prices may incentivize exploration activities, consulting firm Wood Mackenzie estimates that by 2028, about 80 mines will exhaust their current production plans, indicating limited supply elasticity in the short term.