Published: 23 Sep 2026, 17:15 BST
Gold price falls towards $4,280, but UBS remains positive over the next 12 months as reserve diversification and debt concerns support demand.
Gold's latest retreat has pushed the metal back towards last week's lows, testing UBS's view that tighter US monetary policy can coexist with a positive longer-term outlook.
The gold price in US Dollars (XAU/USD) fell 1.92% to around $4,280 an ounce on Wednesday, giving back most of its recovery since the Fed decision.
UBS acknowledges that the Federal Reserve's latest rate increase could keep inflation-adjusted US yields and the Dollar elevated, weighing on gold.
Higher yields increase the appeal of interest-bearing assets relative to bullion, which pays no income.
"However, we do not believe the strategic investment case has changed."
The bank's argument extends the reserve-diversification case it made earlier this month:
"Looking ahead, however, we believe central bank demand, continued diversification away from the US dollar, and global debt concerns will remain important structural supports."
The World Gold Council's June survey of reserve managers found that 89% expected global central-bank gold holdings to increase over the following year.
UBS favours a broader spread of commodity holdings
Gold remains part of UBS's wider case for commodities as protection against geopolitical stress, supply shocks and inflation.
"We continue to view gold as a useful strategic diversifier, and we remain constructive on gold prices over the next 12 months."
Elsewhere, the bank sees opportunities from constrained supply, electrification and investment in AI infrastructure, particularly in copper.
For investors already holding substantial gold gains, UBS says higher prices may offer an opportunity to rebalance some exposure into other commodity sectors.
