(Kitco News) – The current correction in precious metals prices is the result of lowered near-term geopolitical instability, but gold and silver will both post further gains in the second half of 2025, according to Francisco Blanch, head of global commodity and derivatives research at Bank of America Securities.
“We've been calling for $3,500 gold for the first half of this year,” Blanch said in an interview with CNBC. “We got there, and we feel the market's going through a correction right now that could last a few months. We're still bullish longer term. We think longer term, maybe into the second half or into 2026, we'll breach $4,000 per ounce, but we're going through a correction because some of the extreme uncertainty that we've witnessed in recent months seems to be fading.”
“We've gotten very close to $3,500 a couple of times, but to breach that level and keep moving up, we need some of this geopolitical turmoil, some of this policy uncertainty to creep back up again,” he said. “We expect it to happen into year-end, into ’26, but for now we think it's unlikely we will move up in a straight line from here.”
Blanch was then asked about BoA’s view of silver, which has lagged gold prices as it suffered from weaker industrial demand.
“We are looking at $40 per ounce,” he said. “We think silver is one of the better investments because remember, silver is half precious, half industrial. The precious aspect of silver has been driving it higher, the industrial side has been taking a back seat, but this will eventually change. Of course, tariffs mean weaker trade conditions, and we had a pretty strong trade window between the fourth quarter of last year and the first quarter of this year, where investors were buying in anticipation of tariffs. Now we have the tariffs, so we're going to go into a slower period which will last for a quarter or two, and eventually we will see another pickup in industrial activity.”
“If you are to model silver, the main drivers are of course the price of gold, because silver is largely a precious metal, but also what's going on with industrial activity,” he added. “Right now, industrial activity is going to be weaker, so that's one of the reasons silver has lagged on the large upward lift in gold prices; it's really that weaker industrial factor we're seeing today.”
“Silver is linked to solar panels, we still expect enormous investment in solar panels and in the electrification of everything, and we think silver plays a critical role,” Blanch pointed out. “Remember, silver is the best electricity conductor in the world, so it's going to play a very important role, and we think going forward, once we go back into a more stable industrial activity environment, silver will shine again.”
Gold prices are continuing to struggle below $3,300 per ounce toward midday on Tuesday, with spot gold last trading at $3,294.15 for a loss of 1.45% on the daily chart.
Silver prices are also down on Tuesday, but the gray metal is showing upside as well as downside volatility. Spot silver last traded at $33.068 per ounce for a loss of 1.27% on the session.
