UBS forecasts gold to reach USD 3,700 per ounce by the end of June 2026. This prediction is based on the expectation of lower US interest rates, which typically help assets like gold that don’t earn interest. UBS also highlights that ongoing geopolitical risks will likely support gold prices. They suggest that lower real rates will further benefit gold in the near term. ANZ takes a short-term view, advising investors to watch the upcoming US jobs report. They believe precious metals, including gold, could see a price increase if the Federal Reserve cuts rates in September. The upcoming jobs report is seen as crucial for determining whether the current precious metals rally will continue. This indicates how sensitive the market is to economic data that influences interest rate expectations. Currently, the market anticipates an 85% chance of a Federal Reserve rate cut at the September 17th meeting. Therefore, everyone is focused on this week’s jobs report. A non-farm payroll figure below the expected 150,000 would strengthen these rate cut expectations, making the upcoming data a key trigger for gold prices. Traders dealing in derivatives should prepare for potential volatility around this announcement. Market uncertainty has led to increased premiums on short-dated options. A straightforward strategy is to buy call options, betting on a worse-than-expected jobs number, which would likely boost gold. This short-term outlook connects directly to the longer-term bullish view of gold hitting $3,700 by mid-2026. A move by the Fed towards easing, supported by a softening labor market, is essential for this forecast. Lower real interest rates and ongoing geopolitical tensions would drive such a rally. For those with a longer investment horizon, longer-dated call options could be a wise choice. For example, buying June 2026 calls with a strike price around $3,000 would allow investors to take advantage of the expected price increase while managing risk. This strategy aligns with patterns seen during the Fed’s easing cycle in 2019, which led to a significant gold rally. However, it’s important to be ready for surprises. If the jobs report shows unexpectedly strong results, it could undermine the rate cut scenario and lead to a sharp, but likely temporary, drop in gold prices. In such a case, holding put options could provide a solid hedge against long-term bullish positions.

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