Gold miners extend rally as UBS upgrades price forecast
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The news: UBS increased its gold price forecast for the second time in a week and upgraded its rating on ASX-listed miner Newmont, as escalating trade wars continue to drive up demand for the safe haven metal.
The numbers: UBS lifted its 2026 average forecast by USD600 ($954) to USD3,500 an ounce. Its long-term forecast of USD2,200 an ounce is unchanged.
Spot gold hit a fresh high of over USD3,245 on Friday. It last traded at USD3,233, according to Bloomberg data.
UBS also upgraded Newmont to 'buy' and Regis Resources to 'neutral'. Newmont shares were up 4.6% at 2:15pm AEST, with Regis up 0.1%.
UBS remains 'buy' rated on Genesis Minerals (2.6%), Perseus Mining (2.1%), De Grey Mining (1.8%), Gold Road Resources (0.7%) and Northern Star Resources (0.6%). It is 'neutral' rated on Evolution Mining (2.1%).
The context: UBS analysts said its latest gold price upgrade was driven by an escalation in trade wars, much weaker growth outlook and higher overall uncertainty.
What they said: "Despite the recent move in gold, consensus positioning indicators do not signal that the trade is crowded," the analysts said.
"A move higher will continue to be driven by official sector, long-term asset managers, private wealth and retail investment buying. China is expected to remain a strong buyer with continued bullish sentiment and indicators of pent-up demand."
The source: UBS research
