UBS Upgrades Gold Target; Recommends Buying Gold Now

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UBS declares gold a “must-have asset”

Bullion.Directory precious metals analysis 27 August, 2025
By Peter Reagan
Financial Market Strategist at Birch Gold Group

Those same analysts have adjusted their gold price forecasts modestly: $3,600 by Q1 of next year; $3,700 by Q2.

Honestly, it’s difficult to take these price targets seriously! Consider the facts cited by these analysts:

• Total gold bullion demand in 2025 will reach a 14-year high
• Central bank gold buying will come within a few tons of matching 2024’s near-record levels
• And the macroeconomic backdrop: “…questions over the Fed’s independence, worries about fiscal sustainability, and geopolitics underpinning de-dollarization trends…”

With all that as a backdrop, they predict an 8% gain in gold’s price? Seems conservative to me, considering the $4,000 forecasts from Goldman Sachs, WisdomTree and others.

Central bank purchases should stay strong, albeit slightly below last year’s near-record purchases. We, therefore, now forecast global gold demand to increase by 3 percent to 4,760 tonnes in 2025, which would mark the highest level since 2011.”

In case you’ve forgotten, 2011 was the year we saw a major debt ceiling standoff resulting in the first credit downgrade for the U.S. government. The U.S. was mired in the Great Financial Crisis – and, the European debt crisis was in full swing. I honestly expected Greece, Portugal and Italy to declare bankruptcy and possibly collapse the entire Euro Zone.

That’s right – two global financial crises were underway back in 2011. And gold demand is at that same crisis level today… Yet somehow that’s not front-page news.

UBS has some comforting words for you, if you sat out the bull run in gold so far. They forecast silver’s price to rise 10-15% in the next six months – and, should the price dip below $36, recommends jumping in at that price:

We favor a long position in silver and would add to positions on pullbacks below $36/oz,” strategists Dominic Schnider and Wayne Gordon wrote.

To summarize, UBS says:

• You should definitely diversify with gold…
• …but if you haven’t, silver looks very promising

Concerns about the price of gold today? My colleague Phillip Patrick recently explained why gold is not, in fact, “too high” in price.

Personally I believe you should own both gold and silver – although they’re both precious metals, they respond very differently to changes in the economy. I think everyone who owns gold should also own at least a little silver, and everyone who owns silver should own at least a little gold.

If you want to follow UBS’s recommendations, I suggest you take a look at these proof Britannia silver coins, available in the U.S. only from Birch Gold Group.

Oh, and speaking of gold demand, there’s another major factor about to hit the global gold market…

China set off a gold demand “bomb”

Finding the next big news in the gold market these days is a tricky thing. One record high price after another shattered, 1,000-ton+ annual buying by central banks, massive COMEX withdrawals and supply shortages… It’s an eventful time to be a gold investor.

One story that has all the makings of something big yet is flying under the radar in the West: China’s new policies on gold as a reserve asset.

Beginning in February, Chinese insurance companies were required to diversify their reserves with a minimum of 1% in gold.

That’s just the start – the multi-stage plan expands from big insurance companies to all insurance companies, and from 1% gold reserve minimum to 5% in the next couple years. Now, this is a big deal! China’s insurance sector is the world’s second-largest – we’re talking about $5 trillion in total reserves at play.

At first glance, this is another move in China’s strategy to divorce its economy from the Western financial system and reliance on the U.S. dollar. But there’s more to it.

The decision by the Chinese insurance regulatory authority has far-reaching implications, as it will redirect billions of U.S. dollars, which have predominantly been invested in U.S. government debt, into the gold market. The immediate consequences are already significant, but even more dangerous are the medium-term effects…

First and foremost, this would mean a significant reduction in demand for U.S. government debt – at a time when the U.S. Treasury is issuing some $25 billion in new debt per day. We cannot afford less demand in the debt market!

Second, this is a smart move from a financial stability perspective – like Basel III but for insurance companies. It’s probably intended to help insurance companies weather economic crises in the months ahead.

Third, since China is the world’s leading gold-mining nation and doesn’t allow export of its domestically-mined gold, this guideline expands the domestic market for China’s gold. (Not that they really need it, considering China is already the nation leading the world in gold demand.)

I don’t think it’s an exaggeration to say that China “detonated a bomb” in the gold market.

The gap between supply and demand in the gold market is already wide. We’ve also seen, relatively recently, just how ill-equipped refiners and institutions like the Bank of England are to handle billions of dollars in demand.

So how will this affect global gold market dynamics?

Chinese insurance companies’ reserves are between $4.5-$5.3 trillion.

At least 1% of that ($45-$53 billion) will move out of U.S. government debt, into gold.

That’s 630-750 tons of additional demand! To put this into perspective – it’s about the same amount as three months of global demand for gold coins and bars.

How will that affect price? Well, the Chinese plan itself ran the numbers with a $5,000/oz gold price.

I don’t think that’s unrealistic – as China’s insurers sell their government debt to buy gold, that will put downward pressure on the dollar’s purchasing power at the same time it puts upward pressure on gold’s price.

I’ve said it before: When I buy gold, I think of it as financial insurance. What I didn’t know before now was that insurance companies themselves apparently think of gold as financial insurance, too.

Nicky Shiels: Gold will outperform, and silver and platinum will outperform gold

Nicky Shiels, Head of Research and Metals Strategy at MKS PAMP, has been upgrading her precious metals forecasts across the board.

We can start with gold, which received a moderate 8% upgrade, and Shiels now sees gold hitting $3,600 by the end of the year, with just four months to go. (Again, I think that’s conservative…)

In her report, Shiels explained that other nations don’t really know where to sit with the U.S. and are shorting the dollar in response. Investors have to contend with emerging-market-style changes to U.S. industrial and economic policies (which she compares to China and Turkey!)

We are entering a new era of fiscal dominance (record gov debt & increasing borrowing costs to put [central banks] – not only the Fed! – under pressure); the U.S., Europe & China are fiscally stimulating with 6% budget deficits the new norm. Focus will revert somewhat back to traditional drivers (eg: macro-economic data, Fed) away from tariff-specific headlines — it’s ‘back to basics’ into year-end.

“Overall focus to pivot from trade deals (neutral – bearish) to a slower U.S. economy & faster Fed cuts (bullish).”

Oh, that’s right, we’re supposedly in the middle of rate cutting cycle… Except last time the Fed cut rates, government debt costs went up! (Maybe that’s why the Fed paused?)

For silver, Shiels expects testing resistance of $42 by year’s end, or a 10% price increase. Silver hasn’t been a “volatile upside” metal in a while, as everyone waits for it to reach $50 to start wondering what’s next.

But her most bullish forecast involves platinum. She upgraded her targets by 38% to $1,350 by year-end, and $1,600 in the next 10 months.

Recently I’ve been watching platinum even more closely than silver – I think platinum is shaping up to be the next major breakout in the precious metals market. Positive changes in regulations, a terrible supply picture and massive ongoing supply deficits… Plus a historically unsustainably low price vs. gold…

There are very compelling reasons that Shiels, like many others, are very bullish on platinum’s prospects in the years ahead.

This article was originally published here

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