UBS Wealth Management: Expects gold to reach $3,900 by mid-2026, Asian currencies may appreciate by 4% in the next year
UBS Wealth Management predicts that by mid-2026, gold prices could reach $3,900 per ounce, benefiting from declining real interest rates and a weaker dollar. The Federal Reserve is expected to cut interest rates by another 75 basis points, and Asian currencies are projected to appreciate by an average of 4% against the dollar over the next 12 months. Investors should consider hedging their dollar exposure and diversifying investments into other currencies. The Chinese stock market still has room for growth, with technology stocks being the preferred choice
According to the report released by the UBS Wealth Management Asia Pacific Investment Director's Office, gold prices may have further room for increase, potentially reaching USD 3,900 per ounce by mid-2026. The bank expects gold to continue benefiting from declining real interest rates, a weakening dollar, and strong investment demand amid ongoing geopolitical risks.
UBS Wealth Management stated that with the Federal Reserve possibly further easing policies and inflation remaining high, U.S. real interest rates are expected to decline further, which is favorable for gold. Although investment demand for gold in China has weakened in recent weeks due to the rise in its domestic stock market, the bank anticipates that as gold prices continue to rise, holdings in Chinese gold ETFs may recover.
The bank also expects the Federal Reserve to cut interest rates by another 75 basis points before the first quarter of 2026, and that the U.S. economy will not fall into recession. In Asia, additional monetary and fiscal support measures are being rolled out, and the technology supply chain continues to benefit from AI demand. It is expected that as the renminbi strengthens and exporters repatriate significant dollar revenues, Asian currencies are likely to appreciate further.
UBS Wealth Management predicts that due to the potential rate cuts by the Federal Reserve being larger than those of other central banks, along with the expected rebound of the renminbi, Asian currencies may appreciate by an average of 4% against the dollar over the next 12 months. Investors should consider hedging their dollar exposure in their portfolios and diversifying investments into other currencies such as the Australian dollar and euro.
Regarding the Chinese stock market, the bank believes that the upward trend has not yet peaked, and as households gradually inject significant additional savings into the market, valuations in innovative sectors such as robotics may continue to be reassessed. Chinese technology stocks remain the preferred choice in this market
