Further gains should be on the horizon for gold and oil prices despite recent rallies having hit the brakes, according to UBS analysts.
Analysts from the bank forecast gold to hit US$2,850 an ounce next year, which would see the previous record around the US$2,680 mark smashed.
“Geopolitical risks are here to stay and will likely keep a risk premium in the prices of both commodities,” analysts from the bank said in a note.
“We also see fundamental factors that should guide both oil and gold higher in the coming months.”
For gold, demand ahead is expected to pick up as central banks continue to wind down interest rates.
Ongoing buying by central banks should also buoy prices, according to UBS, alongside a seasonal recovery for jewellery purchases and Chinese investor interest.
“Uncertainty around the fast-approaching US election should support the bullion” too, analysts said.
Oil was expected to benefit on the back of scaled-back supply, which saw production tick up just 0.3% between December and July, UBS said.
This comes after output has slowed across the OPEC+ cartel, but also in the US and Brazil ahead of an expected drop from the Gulf of Mexico due to recent hurricanes.
“For 2025, we expect another year of subdued US oil output due to lower oil prices, uncertainty on when OPEC+ barrels may come back to the market, and the ongoing focus on capital discipline,” UBS added.
“Demand growth, while suffering from China, continues to lead supply growth with global oil inventories still in decline.”
Monetary easing was also expected to support demand growth, prompting UBS to forecast a rise in oil prices above the US$80 a barrel mark in the coming months.
Benchmark Brent crude was trading at US$78.14 on Thursday, as gold sat at US$2,625.