(Kitco News) - Looking through the unprecedented volatility in metals markets, one Canadian bank remains bullish on gold and silver and expects to see higher prices by the end of the year.
On Wednesday, commodity analysts at CIBC published an updated gold price forecast, and they now see the market averaging $6,000 an ounce this year, up sharply from their October estimate of $4,500 an ounce.
The bank expects gold prices to remain in a broad uptrend, with average prices peaking at $6,500 an ounce in 2027. The bullish comments come as gold finds new resistance at $5,000 an ounce and appears to be entering a new consolidation phase. Spot gold last traded at $4,863.10 an ounce, down 2% on the day.
In its updated forecasts, CIBC sees silver prices averaging around $105 an ounce this year, with average prices rising to $120 an ounce next year.
Despite the recent volatility and sharp correction, the analysts said the same demand drivers from 2025 remain in place. The Canadian bank specifically noted that geopolitical uncertainty will continue to support safe-haven demand. At the same time, the analysts also expect further U.S. dollar weakness to be a key factor supporting higher gold prices.
“Dollar debasement is likely to persist as the central banks and investors react to heightened uncertainty by quietly allocating away from U.S. treasuries. We believe further pressure on the dollar will come from rate cuts and continued tension between the Fed and the White House, and we believe Kevin Warsh will look to tighten the Fed balance sheet in order to lower interest rates for Main Street,” the analysts said.
CIBC noted that gold’s selloff from its record highs last week was triggered by President Donald Trump’s announcement that he would nominate Warsh to replace Jerome Powell as head of the Federal Reserve. Markets expect Warsh, who was previously a Federal Reserve Governor, will be able to maintain the central bank’s political independence.
However, while Warsh has been known for supporting tighter monetary policy, CIBC said they see Trump’s pick as a “dove in hawk’s clothing.”
“Mr. Warsh is seemingly more aligned with a dovish stance than last week’s negative market reaction would imply. He has argued for tighter Fed balance sheets, which he asserts would tamp inflation and allow for lower rates for Main Street. More recently, he has indicated support for Trump’s government efficiency drive, noting it could temper inflation and allow for lowering of rates,” the analyst said. “Regardless, we believe it is unlikely that any candidate would do anything but guide the Federal Reserve Board to lower rates in 2026.”
Looking beyond U.S. monetary policy, CIBC said the broader global fiat currency debasement trade will support global demand for gold.
“With the decades-long de facto safe-haven asset, U.S. Treasuries, no longer considered ‘risk-free,’ investors and central banks are looking for alternatives. The pickings are slim. Most Western economies are facing near-record debt-to-GDP ratios, and most are looking to inflate rather than constrain their way out of the dilemma. Investor confidence in fiat currencies has eroded, and gold has seen much of this flight to safety,” the analysts said.
