Gold dips 1.5%, but $6.2k still in sight
Prices pullback, but UBS doubles down on targets
The gold rally hit a speed bump on February 24.
After surging to a fresh monthly peak above $5,250, prices reversed sharply as a stronger U.S. dollar triggered profit-taking. Spot gold fell 1.5% to $5,150.38 by early Tuesday, snapping a four-session winning streak.
But here's the key takeaway: the pullback looks like a pause, not a reversal.
UBS doubles down on $6,200 target
Despite the overnight dip, UBS is standing by its bullish call. On February 24, the bank reiterated its forecast for international spot gold to hit $6,200/oz in the coming months.
Their reasoning? Two big drivers:
Geopolitical risk: US-Iran tensions aren't going away. The State Department just pulled non-essential personnel from Beirut, signaling rising concern about military conflict.
Rate cut expectations: UBS analysts argue the Fed's loose monetary policy will continue, putting pressure on real interest rates.
JPMorgan has also flagged that central bank buying remains structural, with official sectors purchasing 863 tonnes in 2025 and similar accumulation expected this year.
Why prices pulled back today
Tuesday's sell-off came down to three factors:
Dollar strength: The dollar firmed, making gold more expensive for overseas buyers.
Profit-taking: After Monday's 2.5% rally – which followed the Supreme Court striking down Trump's emergency tariffs – traders locked in gains.
Fed hawkishness: Governor Christopher Waller signaled he's open to holding rates steady in March if jobs data stays strong.
Buy the dip or wait?
It's a classic tug-of-war: short-term profit-taking versus long-term structural demand. The dollar might flex today, but central banks aren't slowing their accumulation. Geopolitical risks aren't fading. Rate cuts are still coming.
Key support sits at $5,100 – and it held during Tuesday's dip. The uptrend stays intact, even if volatility sticks around.
So what's your position? Buy the dip aiming for that $6,200 target? Or wait for more downside and watch that support level?
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