Gold’s $4,520 Tightrope: Hormuz Standoff and Hawkish Fed Vie for Control as UBS Scales Back Its Forecast
02.06.2026 - 20:13:06 | boerse-global.de
The yellow metal is caught in a classic tug-of-war. At $4,520 an ounce, gold has slipped roughly two percent below its 50-day moving average of $4,641, while sitting 17 percent shy of the 52-week peak of $5,450 hit in late January. One force—geopolitical turmoil—keeps the safe-haven bid alive; the other—a hardening Federal Reserve—raises the opportunity cost of holding a zero-yield asset. The latest sign of that pressure: UBS has slashed its year-end 2026 target by $400.
The Swiss bank now sees gold at $5,500 by December, down from its prior forecast of $5,900. A stubbornly high interest-rate environment and a resurgent dollar are to blame, analysts said. The DXY sits around 99 points, and markets now assign a 60 percent probability to a Fed rate hike before year-end—a prospect that strengthens the greenback and makes dollar-priced bullion more expensive for overseas buyers. Still, UBS maintains a bullish long-term view, noting that the current level implies roughly 22 percent upside if the current risk backdrop persists.
That backdrop is unusually dense. The Strait of Hormuz remains effectively shut since the joint US-Israeli strike on Iran in late February. Normally 20 million barrels of oil—about one-fifth of global seaborne crude—pass through the chokepoint daily; today traffic is running at roughly five percent of pre-war levels. A 60-day ceasefire memorandum has been tabled that would reopen the strait and restart nuclear talks, and President Trump has hinted a deal could come as early as next week. But Tehran has suspended communication with mediators after Israeli operations in Lebanon, and Secretary of State Rubio described the negotiation status as simply unclear.
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Meanwhile, fresh military escalation elsewhere is reinforcing the safe-haven bid. Ukraine reported heavy Russian air strikes on Kyiv and Dnipro, while Israeli operations in Lebanon continue despite existing ceasefires. These crises—combined with delays in a potential Iran framework—prevent gold from suffering deeper losses. In euro terms, the metal is up roughly 11 percent since the start of 2026.
Fundamentally, demand tells a more nuanced story. The World Gold Council reported that global gold demand hit an all-time high of $193 billion in the first quarter of 2026, a 74 percent surge year-on-year, driven almost entirely by the price spike. In tonnage terms, demand edged up two percent to 1,231 tonnes. Chinese retail investors bought a quarterly record of 207 tonnes of bars and coins—one-third above the previous high set in 2013. Central banks added a net 244 tonnes, led by Poland’s National Bank with 31 tonnes in the quarter alone. Jewelry, however, collapsed 23 percent as consumers balked at record prices.
The near-term catalyst remains the Hormuz standoff. An agreement would ease oil prices and inflation, removing a key prop for gold. But until then, the metal is caught between the twin forces of crisis demand and rate-hike expectations, with UBS’s trimmed target offering a reminder that the path higher is anything but smooth.
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