Gold remains 8.2% higher since the start of this year, and economists at UBS think it is likely to break its all-time high later this year with multiple mid- to longer-term drivers.

Central bank demand should remain robust

“Central banks are on track to buy around 700 metric tons of Gold this year, much higher than the average since 2010 of below 500 metric tons. We think this trend of central bank buying is likely to continue amid heightened geopolitical risks and elevated inflation.”

Broad US Dollar weakness supports Gold

“The direction of a weakening USD is clear, we believe the reduction in US yield carry will continue to weigh on the greenback. Gold has historically performed well when the US Dollar softens due to their strong negative correlation, and we see another round of USD weakness over the next 6-12 months.”

Rising US recession risks may prompt safe-haven flows

“Recent data coming out of the US showed the country’s growth is slowing. Tighter credit conditions, evidenced by the Fed’s latest Senior Loan Officer Opinion Survey, are also likely to weigh on growth and corporate profits. Based on data since 1980, Gold’s relative performance versus the S&P 500 improved significantly during US recessions.”