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Commodities February 22, 2026

UBS: Gold Volatility a Reset, Not a Regime Change — $6,200 Peak Predicted in 2026

Bank points to central bank and ETF demand and expected Fed cuts as the foundation for further gains despite recent one-day plunge

By Caleb Monroe
UBS: Gold Volatility a Reset, Not a Regime Change — $6,200 Peak Predicted in 2026

After a dramatic spike to a record intraday high at the end of January and an abrupt one-day drop, UBS strategists say the drivers behind gold's rally remain intact. The bank highlights ongoing central bank and ETF purchases and expects two U.S. rate cuts this year, forecasting a mid-year peak of $6,200 per ounce before year-end consolidation.

Key Points

  • Gold struck an intraday record of $5,594 per ounce on 29 January, then dropped 9 percent the next day toward intraday lows of $4,400, later stabilising below $5,000.
  • UBS describes the recent swings as a "reset rather than regime change," noting spot prices remain about 15 percent higher in 2026 and identifying $4,500–$4,800 as a range where fundamentals matter.
  • UBS projects central bank purchases to increase from 863 metric tons in 2025 to 950 tons in 2026, with ETF inflows forecast to rise to 825 tons, and sees gold potentially reaching $6,200 by mid-2026 before consolidating to $5,900 by December.

Gold experienced wild price movements at the start of the year that have prompted fresh questions about its near-term trajectory. UBS analysts, however, contend that the forces that lifted the metal earlier in 2026 are still in place.

On 29 January the yellow metal reached an intraday record of $5,594 per ounce. The following day it fell 9 percent and moved toward intraday lows near $4,400 - a swing that UBS strategist Vincent Heaney said "unsettled investors." Since that dramatic reversal, spot prices have steadied below $5,000, navigating a balance between dip-buying activity and changing expectations about the Federal Reserve's rate path.

UBS frames the episode not as a structural shift but as a recalibration. The bank notes that spot prices are still about 15 percent higher in 2026 and characterises the recent turbulence as a "reset rather than regime change." It identifies the $4,500–$4,800 range as an area where "fundamentals reassert their influence," pointing to an outlook that includes two additional U.S. rate cuts this year alongside "continued firm demand from central banks and ETFs."

Evidence of robust demand appears in the bank's data points. Central banks purchased 863 metric tons of gold in 2025, and UBS now projects central bank purchases will reach 950 tons in 2026. Meanwhile, the bank expects ETF inflows to increase to 825 tons. UBS suggests that such demand dynamics help explain why volatility may mirror earlier mid-cycle pullbacks - instances the bank cites include 1974 and 2020 - where prices fell but later resumed an upward path.

Looking ahead, UBS expresses confidence that the gold market can continue its advance through 2026. Its baseline projection calls for prices to reach as high as $6,200 per ounce by mid-year, followed by a consolidation to $5,900 per ounce by December. For investors seeking protection against inflation and geopolitical risks, the bank recommends a "mid-single-digit-percentage allocation."

Contextual implications:

  • Monetary policy expectations - particularly the timing and size of U.S. rate cuts - are central to price direction.
  • Demand from central banks and ETFs is presented as a key structural support for bullion prices.
  • Financial markets, portfolio hedging strategies, and sectors sensitive to inflation and geopolitical risk may be affected by gold's trajectory.

Risks

  • Near-term price volatility - sudden large moves, like the 9 percent drop after the January high, can unsettle investors and affect portfolio allocations. Impacted sectors: financial markets and portfolio managers.
  • Shifts in Fed rate expectations - changing expectations for U.S. interest rate cuts could influence gold's attraction as an asset. Impacted sectors: fixed income markets and interest rate-sensitive sectors.
  • Potential for demand variations - while UBS projects rising central bank and ETF purchases, any deviation from these projections would affect prices. Impacted sectors: commodity markets and exchange-traded product providers.

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