Gold has been one of the defining trades of the last three years. The question now is whether the structural case that powered the rally is still intact, or whether the market is living off momentum it built when conditions were cleaner. Joni Teves, Precious Metals Strategist at UBS Investment Bank, thinks the case is intact. She just wants investors to be honest about what the next few months look like before the next leg higher.
$5,600
UBS gold target, 2026
Tapering
Central bank buy pace
Choppy
Gold ETF flows recently
Outperform
Silver vs gold on upside
Her $5,600 price target for gold in 2026 is the headline number, but the more interesting part of her thesis is what she says is driving it. Not central bank buying, which has actually slowed and seen some net selling from select banks in the first quarter. Not ETF flows, which she describes as choppy and muted. The real engine, she argues, is diversification: a structural shift in how investors, official, institutional, and retail alike, now think about gold as a portfolio asset.
"The structural shift started in 2022 when the sanctioning of the Russian central bank changed how the world thought about reserve assets. Since then, it has been one macro shock after another and gold has become a core holding, not a satellite one", says Teves
Why this cycle differs from previous gold bull runs
That reframing, from hedge to core holding, is what Teves believes makes this cycle different from previous gold bull runs. And it is why she does not lose much sleep over the near-term headwinds: higher US real rates, a firmer dollar, and the pass-through effect of elevated oil prices on inflation expectations and Fed policy. These are real pressures, she acknowledges, and consolidation or further downside cannot be ruled out in the months ahead. But they do not change the medium-term picture.
In fact, she flips the oil price narrative on its head. Higher oil eventually drags on growth. Slower growth raises the probability of a more dovish Fed pivot. And a dovish Fed, historically, is one of the cleanest setups for a gold rally. The near-term risk is to the downside; the medium-term risk, she says, is skewed the other way.
"Near term the risks are to the downside. Medium to long term the risks are actually skewed more to the upside, particularly if growth disappoints and the Fed has to respond", says Teves.
Silver to outperform gold on the way up
On silver, Teves is constructive but conditional. Her base case is that silver outperforms gold on the way up, as it has historically and did dramatically earlier this year. The caveat is growth: silver has an industrial demand component that gold does not, and in a scenario where the macro weakens more than expected, silver's relative edge over gold narrows. Volatility, she adds, will stay elevated across both metals as long as macro uncertainty does.
For investors trying to time a re-entry, her message is measured patience. Positioning is light, conviction is low, and the short-term is genuinely difficult to trade. But the underlying thesis of diversification into gold in an era of persistent geopolitical and macro risk has not broken. UBS thinks prices move higher before the year is out. The bull run, in their view, is in its latter stages. It is not over.
