Major financial institutions including Citi and UBS updated their gold price forecasts, reflecting a positive outlook on the precious metal amidst increasing trade war concerns and significant gold purchases by central banks. These revised projections come as gold's value benefits from heightened market uncertainties and geopolitical tensions.

Strategists from Citi and UBS this week have raised their gold price targets, suggesting that the ongoing bull run for gold is likely to persist. The adjustments in forecasts are a response to the pressures of geopolitical strife and economic uncertainties affecting global markets.

Gold-backed cryptocurrencies such as PAXG and XAUT, which are pegged to the value of physical gold, are experiencing growth aligned with the rising price of the metal. These digital assets have been outperforming the broader cryptocurrency market, driven by the same factors buoying gold prices.

Citi has set a new short-term gold price target at $3,000 per ounce, with its average forecast for the year now at $2,900, an increase from the previous $2,800. The revision by Citi is attributed to not only the trade wars and central bank activity but also concerns over global economic growth that could bolster gold demand.

UBS has similarly adjusted its 12-month gold price forecast to $3,000 per ounce, up from $2,850. The metal has already surpassed this earlier target, currently trading at $2,860, representing a 9% increase since the beginning of the year.

UBS strategists, led by Mark Haefele, noted in their report that gold's "enduring appeal as a store of value and hedge against uncertainty has again proven itself." Additionally, Citi's analysis highlighted the role of trade conflicts and geopolitical tensions in reinforcing trends of reserve diversification and de-dollarization, particularly in emerging markets, which supports their gold demand.

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