UBS's commodity analyst stated that after a strong rebound last week, gold prices have further declined due to weakened expectations of a Fed rate cut in December. However, gold still has a strong driving force, and next year the price of gold will rise to $2900 per ounce.

Analysts pointed out that the decline in spot gold on Monday effectively erased last Friday's rally. They said, "After five consecutive days of rising gold prices and President elect Trump's selection of Besant as Treasury Secretary, there was profit taking

Analysts added, "Bessent is seen as a 'fiscal hawk,' so his choices may ease concerns about the federal deficit and the execution of the incoming president's plan. Expectations of a Fed rate cut in December continue to decline, with the CME Fedwatch tool showing a 56% chance of a December rate cut in the money market, down from 62% last week

UBS believes that gold prices are expected to continue fluctuating amidst competing signals such as inflation, interest rates, geopolitics, and upcoming US trade policies.

They said, "We believe there is still room for further increase in gold prices, with the goal of reaching $2900 per ounce by the end of 2025. We believe that gold remains a useful hedge against geopolitical tensions and fiscal concerns

UBS precious metals strategist Joni Teves stated in late October that gold still has strong support, and even though the price was close to $2800 per ounce at the time, investor allocation was still relatively low.

He said, "We still have a positive outlook on gold and believe that the prospects for gold next year are quite optimistic. The loose policy of the Federal Reserve continues to support gold, and the fundamentals continue to improve. We expect the central bank to continue purchasing gold, and even if prices continue to rise, we believe that physical demand will remain elastic

UBS also believes that investors still have enough room to establish gold positions. Teves added, "Overall, we believe that the market's investment in gold is still insufficient, so there is still room for increased allocation

Daily chart of spot gold