Gold has stood out as the best-performing asset class so far in 2025, climbing 29% year-to-date and surpassing the returns of leading stock indices, bonds, G10 currencies, and bitcoin, according to a report published Tuesday by UBS.
UBS continues to rate gold as “Attractive” within its global asset preferences, emphasizing that hedging strategies remain crucial as investors oscillate between periods of fear and greed. The bank has set a price target of USD 3,500 per ounce for the precious metal.
Data from the World Gold Council’s second-quarter report points to a slight deceleration in central bank gold purchases. However, their latest survey reveals that 43% of reserve managers intend to boost their gold holdings over the next 12 months—up from 29% in the previous year’s survey. This reduced official demand has been balanced by robust investment inflows, with strong buying noted in both exchange-traded funds (ETFs) and the physical bar and coin market.
Factors such as the ongoing move away from the U.S. dollar, concerns over sanctions, and doubts about the Federal Reserve’s independence have all played a role in driving gold’s robust gains, alongside persistent geopolitical tensions and macroeconomic uncertainties. These influences underpin UBS’s optimistic price outlook.
For portfolio diversification, UBS advises allocating a mid-single-digit percentage of assets to gold, especially for investors who favor exposure to the precious metal.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.