(Kitco News) - The gold market is expected to continue its run to record highs; however, investors should temper their expectations, as analysts at the World Bank forecast prices to rise by only 5% in 2026—a sharp contrast to this year’s 50% rally.
In its updated commodity outlook, the World Bank projects gold prices will average around $3,575 an ounce in 2026. The international development organization also expects silver prices to average $41 an ounce next year, up 7.9% from current average prices.
However, the rally in gold and silver could come to an end by 2027. The World Bank forecasts gold prices will average around $3,375 an ounce that year, down more than 5% from 2026. Silver prices are expected to average about $37 an ounce, nearly 10% lower.
“The rally in recent months has been driven largely by investment demand, supported by a combination of geopolitical tensions, macroeconomic concerns, and heightened policy uncertainty, reinforced by a weaker U.S. dollar and recent U.S. monetary policy easing,” the analysts said. “Gold prices are expected to increase by 42 percent in 2025 (y/y). The last major surge occurred in 1979-80, when gold prices almost doubled amid soaring U.S. inflation, oil price shocks, a weakening dollar, and geopolitical turmoil. Gold’s current rally has again coincided with heightened geopolitical tensions and a weakening dollar, but unlike in 1979-80, inflation pressures and energy-market disruptions have been less intense. Instead, a key distinguishing feature has been the unprecedented pace of central bank purchases.”
While gold could face some selling pressure in 2027, the World Bank still expects the market to establish an elevated baseline.
“Despite the anticipated moderation, prices are envisaged to remain more than 180 percent above their 2015–19 average in 2026,” the analysts said.
The World Bank is even more optimistic about silver next year as both investment and industrial demand continue to drive prices.
“Silver demand is projected to continue growing steadily, reflecting its dual role as a safe-haven asset and a critical input in fast-growing sectors such as renewable energy and the production of semiconductors,” the World Bank said.
While the World Bank maintains a cautious outlook, the analysts noted that there are upside risks to their forecasts.
“Although geopolitical tensions and policy uncertainty have eased somewhat in recent months, any renewed escalation—through trade frictions, higher tariffs, or worsening conflicts—could trigger additional safe-haven inflows, pushing gold and silver prices above current projections. Unexpected financial volatility could also push precious metal prices higher,” the analysts said.
On the other hand, the analysts warned that easing geopolitical tensions and hawkish monetary policies could weigh on both safe-haven and investment demand for gold and silver.
