The decline in gold prices in recent weeks has raised serious questions in the minds of investors. It is a matter of curiosity whether the precious metal will rise again.
According to analysts at Swiss bank UBS, the weakness in gold may not be permanent. The bank points out that gold, which gained up to 25 percent at the beginning of the year, has given back most of its returns in 2026.
One of the most important factors in this decline is rising energy prices. Rising energy costs have strengthened expectations for tighter monetary policy in the markets. This increased the cost of holding non-interest-bearing gold.
Similarly, bond markets are pricing in multiple interest rate hikes by the European Central Bank and the Bank of England.
UBS, which expects relaxation from the FED this year, thinks that gold demand will revive when the market’s flight to liquidity phase ends.
On the other hand, the expectations of the markets have also changed. While approximately two and a half interest rate cuts were previously predicted for 2026, no additional relaxation is expected anymore. There is even talk of the possibility of a small interest rate increase. Similarly, bond markets are pricing in the possibility of multiple interest rate hikes by European and British central banks.
According to UBS, this situation may be temporary. The bank thinks the decline in gold will be short-lived and prices will rebound.
According to forecasts, gold may rise to $6,200 per ounce by the end of June. It is expected to drop to $5,900 at the beginning of 2027. Currently, gold is traded at approximately $4,500.
