- The spot gold price maintained a downward trend near the $4,500 per ounce mark during Wednesday's trading window, continuing the technical correction since reaching a high of $4,880 in April. In the short term, the momentum of bullish positions shows clear signs of waning.
- In its latest macro research report, UBS systematically lowered its target forecast for gold prices at the end of June from $6,200 to $5,200, citing a strong dollar index, persistently high nominal oil prices, and a systematic rise in U.S. Treasury real yields as reasons.
- Despite the pressure to clear short-term speculative derivative positions, the medium to long-term structural strategic buying by emerging market central banks is still seen as the underlying support defense line for the precious metal asset pool, partially offsetting the phase-out pressure on the willingness to hold non-interest-bearing assets from the financial denominator side.
Macro Headwinds Suppress Short-term Performance
Amid the increasingly complex global macro policy environment, the spot gold market is undergoing a valuation correction period after a rapid surge in early 2026. UBS points out that the continued strength of the dollar index and the rise in U.S. real bond yields constitute the two main nominal financial variables currently suppressing the upward space for gold prices. Due to the marginal evolution of the geopolitical situation in the Middle East delaying the institutional timetable for major central banks to initiate liquidity easing, the overall global financial environment exhibits a de facto tightening characteristic. This high opportunity cost holding environment has led to a phase of profit-taking by short-term hot money that previously flowed into gold exchange-traded funds, causing spot prices to continue to face technical consolidation pressure around $4,500.
Central Bank Non-structural Rebalancing Resets Gold Purchase Boundaries
In a deep audit of official reserve behavior, UBS has implemented risk isolation determinations on recent gold sales by some sovereign central banks. The short-term reduction moves, represented by the Central Bank of Turkey, are clearly defined as liquidity tactical management behavior under specific macro environments, rather than strategic rebalancing or de-goldification tendencies. Official foreign exchange reserve management agencies view gold assets as highly liquid non-liquid buffer tools when facing domestic endogenous economic settlement needs. Although this tactical fund recall operation has caused a marginal increase in supply in the secondary market, since many emerging market reserve institutions have not yet achieved their long-term asset diversification allocation goals, the subsequent increase in allocation demand due to low allocation ratios will maintain purchase inertia in the medium to long cycle.
Forward Pricing Model Still Anchored to Reflation Defense
Despite the continued correction in nominal prices in the short term, the macro defensive attributes of gold in the medium to long term have not fundamentally wavered among selling institutions. UBS's current forward revision model predicts that as the global macro landscape enters a typical stagflation background of growth slowdown and reflation stickiness in the second half of the year, gold, as a hard asset, will once again rise as a safe-haven center. Since market pricing models generally underestimate the friction effects of long-cycle supply chain disruptions and international trade barriers on the global core price index, when the unemployment rate rises and inflation stickiness is simultaneously confirmed by the market, speculative capital flows are expected to undergo a second reversal. The bank maintains a constructive mid-term judgment that gold will move towards $5,900 per ounce by the end of 2026, considering the current downturn as a healthy consolidation of a structural bull market.
