UBS has significantly upgraded its gold price outlook, setting a new target of $5,000 per ounce for the first three quarters of 2026. The investment bank announced this revised forecast on Monday, representing a substantial increase from its earlier projection of $4,300 per ounce by end-2026.

Revised Price Targets

The bank's updated gold price projections reflect a more bullish stance on the precious metal's performance over the next few years.

Key Market Drivers

UBS expects gold demand to rise steadily through 2026, supported by several fundamental factors:

• Lower real yields, which typically make non-yielding assets like gold more attractive to investors
• Persistent global economic concerns, supporting safe-haven demand for the precious metal

Policy Uncertainty Impact

U.S. domestic policy uncertainty emerges as a significant factor in UBS's analysis. The bank specifically highlights concerns related to:

• Midterm elections
• Rising fiscal stress

These political and economic uncertainties are expected to drive investors toward gold as a hedge against market volatility.

Risk Scenario Assessment

UBS has also revised its upside price target for gold under stressed market conditions. In scenarios where political or financial risks increase substantially, the bank projects gold prices could climb to $5,400 per ounce, up from its previous crisis scenario target of $4,900 per ounce. This adjustment reflects the bank's assessment of heightened potential for market disruption and the corresponding flight-to-quality dynamics that typically benefit gold.

Gold and silver prices surged following the US military capture of Venezuelan President Nicolás Maduro and his wife on January 4, 2026, creating significant geopolitical tensions that boosted safe-haven demand for precious metals. The dramatic escalation in US-Venezuela relations has pushed both metals higher as investors seek protection against regional instability and potential global economic disruptions.

Current Market Performance

US gold futures for February delivery settled 1.00% higher at $4,496.10, while spot gold gained 0.80% to $4,485.39 per ounce after a substantial 3.00% rally in the previous session. This brings gold prices closer to the record high of $4,549.71 hit on December 24, 2025, with the metal demonstrating strong momentum following the Venezuela developments.

Silver demonstrated even stronger performance, with spot prices gaining 5.40% to $80.68 per ounce. The white metal, which hit an all-time high of $83.62 on December 29, continues to benefit from both safe-haven flows and robust industrial demand expectations.

Indian Market Dynamics

Domestic precious metals markets reflected mixed sentiment despite global strength. Gold futures due for February 5 expiry settled 0.03% lower at ₹1,39,040 per 10 grams on the Multi Commodity Exchange (MCX), while silver futures for March 5, 2026 expiry closed 0.31% lower at ₹2,58,000 per kilogram.

The yellow metal soared 64.40% in 2025, logging its best annual performance since 1979, while silver recorded its strongest annual gain, surging 147.00% on rising industrial and investor appetite.

Geopolitical Impact and Strategic Outlook

The capture of Maduro, who pleaded not guilty to narcotics charges in a US court on Monday, has created a significant geopolitical shock that analysts believe could have lasting implications for precious metals. "Such an escalation would heighten global risk aversion, particularly given Venezuela's strategic role in global energy markets and its alliances with non-Western powers such as China," said analysts at VT Markets.

Ross Maxwell, Global Strategy Operations Lead at VT Markets, noted that gold traditionally benefits from geopolitical stress due to its safe-haven status, and a US-Venezuela conflict could accelerate central bank and institutional demand. He predicted that sustained tensions could reinforce the broader trend of de-dollarisation and diversification of reserves, supporting higher gold prices through 2026.

Expert Analysis and Market Outlook

Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, emphasized that risk sentiment continues to favor higher allocation toward gold amid renewed global geopolitical tensions. "Reports of US crossing Venezuela border and heightened alerts of its leadership is adding to global uncertainty. These developments are keeping safe-haven demand firm," said Trivedi.

Maxwell noted that silver's impact would be more complex, as while rising uncertainty would drive silver higher alongside gold in the short term, its industrial demand linkage means prolonged instability could weigh on prices relative to gold. However, silver's demand-supply balance remains favorable with strong industrial demand outlook for 2026, particularly in electronics, batteries, and solar panel applications.