Gold has had a bumpy ride in 2026, hitting a record of around $5,400 per ounce in January before falling sharply to $4,000 in July, rebounding to $4,700 in August and closing September at roughly $4,170.
UBS has used the volatility as a prompt for a sector review, arguing that while gold equities remain broadly attractive at current prices, investors should be selective heading into third-quarter results and 2027 guidance season.
The bank keeps a constructive overall stance but identifies two specific risks to sidestep.
These are companies likely to flag negative cost guidance or production downgrades, with Kinross Gold singled out following a guidance cut.
And it points potential acquirers, with UBS warning that deal-driven stocks have tended to underperform and that more mergers and acquisitions are coming across the sector.
The GDX, the main gold miner exchange-traded fund, has swung by as much as 40% in either direction year-to-date, underlining how miners amplify both the upside and the downside of the gold price.
UBS analysts argue valuations are reasonable at current gold levels, with miners trading at around 6 times earnings before interest, tax, depreciation and amortisation (EBITDA) at spot, broadly in line with the two-year average.
Among senior producers, Newmont and Barrick are both rated buy, with price targets of $155 and $50 per share respectively.
Newmont is preferred for its cash return clarity and low merger and acquisition risk.
Barrick is seen as cheaper on valuation despite a more complex investment case following the Nevada Gold Mines settlement with Newmont, under which Barrick paid $1.95 billion to bring three assets into the joint venture.
Among mid-tier miners, Endeavour Mining and SSR Mining both carry 'buy' ratings, with UBS highlighting Endeavour's improving cash conversion and SSR's balance sheet strength and more than $2 billion of deployable cash.
In the streaming and royalty segment, Franco-Nevada is the top pick ahead of Royal Gold and Wheaton Precious Metals.
The note trims near-term silver price forecasts while lifting gold estimates for 2028-29 to reflect a higher medium-term price setup.
UBS now forecasting gold at $4,500 per ounce in both years, against a long-term nominal price of $4,000.
