By Ben McGregor
Educational content only, not investment advice. Mining stocks are high risk.
UBS sees the gold price potentially retesting the $4,000 level, where the bank expects structural buyers to step in. Spot gold traded near $4,015 on Monday, October 26, 2026, after closing Friday, October 23 near $3,996. Strategist Giovanni Staunovo has written that rising real yields and a firmer dollar raise the opportunity cost of holding gold, yet the metal has shown resilience. Central-bank purchases and Chinese demand continue to offset some of the pressure from leveraged traders reducing positions.
Staunovo noted that gold may retest support around $4,000 an ounce in the near term. He wrote that structural dip buyers are expected to establish a floor at that level. Real yields are bond yields adjusted for inflation. Higher real yields make non-yielding assets such as gold less attractive on a relative basis. UBS has kept its forecast of annual central-bank buying at 750 to 1,000 metric tons. The bank also expects the longer-term uptrend to resume toward year-end and into 2027 as markets reassess the path of further rate increases.
Data show that managed-money accounts, which are largely hedge funds and other leveraged traders, have reduced net-long positions in Comex gold futures and options for several consecutive weeks. The reduction has been modest relative to the price decline when compared with earlier periods of speculative selling. Fast-money flows can amplify short-term moves because these accounts often use leverage and face margin calls. When those positions are reduced, the remaining demand from longer-term holders and physical buyers becomes more visible. UBS has pointed out that ETF holdings have remained relatively steady even as futures positioning declined.
Reports highlight continued physical demand from Asia, including purchases of kilobars destined for mainland China. Chinese buyers have also shown interest in settling some transactions in renminbi rather than solely in dollars. Official data and bank estimates indicate that central banks, including the People’s Bank of China, remain net buyers. Goldman Sachs has estimated Chinese central-bank purchases in the range of tens of tonnes in recent months, with China identified as the largest single buyer in some periods. This demand is less sensitive to daily rate moves than speculative futures positioning. It helps explain why gold has not fallen further despite the rise in yields and the dollar.
UBS has maintained a stepped path that reaches $4,600 by December 2026, $5,000 by March 2027, $5,200 by June and $5,400 by September 2027. The forecasts rest on continued central-bank diversification, concerns over government debt levels, and an expected gradual decline in real yields over time. Near-term volatility around $4,000 does not alter that longer-term framework in the bank’s view. Pullbacks toward $4,000 are described as periods when structural buyers have historically added metal. The gold price therefore reflects two clocks: short-term financial-market flows and slower-moving physical and official demand.
Producers such as Agnico Eagle (TSX: AEM, NYSE: AEM) and Barrick Gold (TSX: ABX, NYSE: GOLD) generate most of their revenue from gold. A price that holds near or above $4,000 keeps their margins wider than they were at lower levels earlier in the cycle, provided their all-in sustaining costs remain stable. All-in sustaining costs measure the full cash cost to produce and sell an ounce after sustaining capital. One real risk for these companies is that cost inflation or lower grades offset the benefit of the metal price. Streamers such as Wheaton Precious Metals (TSX: WPM, NYSE: WPM) buy gold at fixed low prices and therefore also gain from higher market prices. Their results still depend on the delivery volumes from the mines that feed the streams.
The Federal Reserve decision on October 28, 2026, and the September PCE inflation release on October 29 will influence real-yield expectations. Any further decline in managed-money net longs will show whether speculative selling has largely run its course. Chinese import data and central-bank reserve updates will indicate whether physical demand remains firm. Company third-quarter results in early November will update production and cost figures for major gold producers.
UBS strategist Giovanni Staunovo said gold may retest support around $4,000 an ounce, where the bank expects structural dip buyers to establish a floor. Rising real yields and a firmer dollar are the main near-term pressures.
UBS forecasts gold at $4,600 by December 2026, $5,000 by March 2027, $5,200 by June and $5,400 by September 2027. The path rests on central-bank buying, reserve diversification and fiscal concerns.
Reports note continued Chinese buying of physical gold, including kilobar demand, even as prices declined. UBS and other desks cite this demand alongside official central-bank purchases as a support that is less sensitive to short-term rate moves.
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Ben McGregor authors the Weekly Roundup at CanadianMiningReport.com, providing sharp analysis of the metals and mining sector. With a talent for spotting trends, Ben distills complex market shifts into clear, engaging insights on TSXV junior miners. His weekly updates cover gold, copper, uranium, and more, blending data-driven perspectives with a knack for identifying opportunities. A vital resource for investors, Ben’s work navigates the dynamic junior mining landscape with precision.