Gold has reached the $2,600 per ounce target by year-end as forecasted by Metals Focus, with the precious metal holding firm near $2,500 an ounce through August. According to Metals Focus Managing Director Philip Newman, gold has the possibility of testing or briefly exceeding the record highs seen in January. The forecast comes as gold demonstrates robust performance, with Newman pointing to weaker US economic data as a central driver, as markets have scaled back expectations for a Federal Reserve interest rate increase this year. Additional support comes from return of tariff tensions between the US and Canada and uncertainty ahead of the US midterm elections.
Silver is positioned for significant gains with Metals Focus calling for a high around $90 per ounce before the end of 26, with triple-digit prices a real possibility for 2027. As reported by CNBC TV18, Newman stated that silver has pulled back sharply from a high near $32 an ounce, but the metal is expected to strengthen significantly. He noted that once silver does strengthen, and if trading gets a little bit thin, then it is a possibility to hit the $120 per ounce level. This bullish outlook represents a significant upgrade from previous forecasts, with Newman describing silver as even more bullish than gold in the current market environment.
Central bank purchases and exchange-traded fund (ETF) buying remain the two main pillars behind gold's rally over the past eight to twelve months. According to Metals Focus, central bank purchases were relatively quiet in the first quarter but followed by an exceptionally strong second quarter. Newman expects another year of strong demand for central bank purchases, though he does not anticipate this year's total to top the past three years, which he called exceptionally high. On ETFs, recent buying has been soft but expects it to return in force again in the coming months, supported by the firm's price outlook for next year.
Indian festival demand is described as cautiously optimistic by Newman, who visited after attending the India Gold Conference in Goa. As reported by CNBC TV18, he noted that price volatility remains a headwind for buyers, but that a decent monsoon season, as relayed by his Mumbai-based colleagues, has helped sentiment. The broader shift in Indian consumer behavior continues with buyers moving toward smaller, lighter pieces and slightly lower purity jewellery, a pattern showing up not just in India but across South and East Asia as buyers try to keep purchases within budget even as gold values rise.
Silver is expected to underperform gold over the next few quarters as current market conditions favor the yellow metal, according to Metals Focus Senior Consultant-South Asia & Middle East Harshal Barot. As reported by CNBC TV18, Barot stated that from a short-term perspective, it is very possible that silver may underperform in the next couple of quarters. The current macro and geopolitical backdrop is more supportive of gold, creating a more favorable environment for the precious metal in the immediate term. This short-term underperformance is expected to persist until silver gains momentum once gold moves closer to its record highs.
