Summary
OCBC has lowered its end-2026 forecasts for both gold and silver in response to a tougher near-term macroeconomic backdrop. The bank pointed to higher real yields, a firmer U.S. dollar and reduced investor demand as the principal factors behind the downward revisions. Despite this, OCBC left unchanged its broader medium-term bullish case for the precious metals, citing persistent structural drivers that should support prices over time.
Revised forecasts
The bank cut its end-2026 USD/XAU forecast to $4,360 an ounce from $5,100. Its end-2026 USD/XAG forecast was also reduced, to $67 an ounce from $89.50. OCBC characterized these adjustments as driven by a more difficult near-term environment rather than a change to its fundamental view on precious metals.
Looking further ahead, OCBC expects gold to average $4,180 per ounce by September 2026, before rising to $4,820 per ounce by September 2027. For silver, the bank projects a move from $64 per ounce to $74 per ounce over the same interval.
Market reaction and recent price moves
Prices reflected the challenging tone in the near term. Spot gold extended recent losses, falling 0.7% on Tuesday, while gold futures slipped 1%. Silver and platinum were also lower, dropping 1.4% and 1%, respectively, on the same session.
Drivers behind the downgrades
OCBC said the downgrade followed a sharp repricing in real interest rates, renewed strength in the U.S. dollar and a more hawkish shift in Federal Reserve expectations. Those developments have reduced the attractiveness of non-yielding assets like gold, the bank noted.
The bank drew a parallel between current market dynamics and the 2013 "taper tantrum," observing that gold has been particularly vulnerable while markets reprice the likely path for U.S. interest rates higher. In that episode, rising real yields prompted a notable correction in bullion before the Fed had begun tightening policy, OCBC said.
Medium-term supports remain, for now
Despite the lower near-term forecasts, OCBC maintained that several structural factors continue to underpin its medium-term bullish stance for gold. These include central-bank diversification, geopolitical uncertainty, fiscal concerns and ongoing demand for portfolio hedges. The bank cautioned, however, that such structural supports may not be sufficient to offset near-term pressure from elevated real yields and slower exchange-traded fund inflows.
For silver, OCBC reiterated a constructive longer-term outlook tied to persistent structural supply deficits and sustained industrial demand. The bank highlighted demand linked to solar power, electrification and electronics as important pillars supporting silver over time. Yet, in the near term, weaker ETF demand, higher real yields and softer investor sentiment have outweighed those positives, leaving silver vulnerable to macro-driven corrections.
Outlook scenarios
OCBC outlined scenarios that could alter the near-term trajectory. Softer U.S. inflation readings, weaker labor-market data or a dovish shift from the Federal Reserve could improve prospects for both metals. Conversely, resilient economic data and persistent inflation could keep real yields elevated and delay a sustained recovery in gold and silver prices.
Reporting on market reactions and OCBC's forecasts was included in the bank's commentary; no additional sources were introduced.