UBS Sees Gold at $3600, Will Raise MCX Price to Rs 108500, Spot Gold Rs 1,10,000

 Chennai: Investment banking firm UBS has raised its target price for gold by $100 to $3600 per ounce for end-March 2026 and such a level might see gold in the Multi Commodity Exchange at Rs 1,08,500 and Rs 1,10,000 in the spot market. While UBS sees persistent US macroeconomic risks, de-dollarization trends, and strong investment demand driving the prices, traders also see some weakness in the medium term as gold prices have doubled in three years.

"We see US macro-related risks, questions over Fed independence, worries about fiscal sustainability, and geopolitics underpinning de-dollarization trends and more central bank buying. In our view, these factors will drive gold prices even higher," UBS said in a note.

UBS also lifted its end-June 2026 forecast by $200 to $3 700 per ounce. UBS raised its full-year ETF gold demand forecast to nearly 600 metric tons from 450 metric tonnes. "Central bank purchases should stay strong, albeit slightly below last year's near-record purchases. We, therefore, now forecast global gold demand to increase by 3 per cent to 4 760 mt in 2025, which would mark the highest level since 2011," UBS added.

As market analysts are slightly bullish on rupee and expect the currency to remain closer to 86.50 in the medium term, the gains in gold prices in the domestic market will be capped. In the Multi Commodity Exchange, gold may see Rs 1,08,500 levels and in the spot market, prices can go up to Rs 1,10,000 per 10 gm.

However, analysts find that the bullion market has already factored in many of the conditions laid down by UBS for the price movement.

“Gold can see the level predicted by UBS under three conditions. There should be renewed geo-political tensions, US inflation should shoot up and central bank buying should continue,” said Ajay Kedia, MD, Kedia Commodities.

However, a ceasefire in the war between Russia and Ukraine and that in West Asia will temper gold's safe haven demand. If the US retail inflation triggered by the higher tariffs moves above 3 per cent levels, there could be some tremors in the markets. But lower crude oil prices can contain inflation to some extent. The central bank buying has been continuing this year, though at a slower pace than 2023 and 2024.

“The gold prices have doubled in the last three years, and such huge returns will force a time correction in the asset class. Price may cool down in the medium term,” he added.