Strong dollar, high yields drag on gold outlook, but central-bank demand lends support

Oct 27 — Analysts cut their 2026 gold price forecast for a second straight quarter because ​of high Treasury yields, a strong US dollar and expectations that rates will stay high for longer, but still expect a recovery in 2027, a ‌Reuters survey shows.

The survey of 30 analysts and traders conducted over the past three weeks returned a median ⁠gold forecast of $4,495 per troy ounce for ​2026, down from $4,509 estimated three months ⁠ago.

The 2027 forecast is $4,650 compared to $4,610 in the previous poll. [COMMODS-GOLDPREC/POLL]

Gold surged to a record $5,595 ‌an ounce in January ‌before tumbling to around $4,000 now, as the Iran war drove oil prices ⁠and Treasury yields higher, strengthened the dollar and ⁠reduced the appeal of non-yielding bullion for investors.

"We expect prices to consolidate and recover in coming months as market focus shifts to de-dollarisation and currency debasement," said Standard Chartered analyst Suki Cooper.

CENTRAL BANKS, FISCAL CONCERNS LEND SUPPORT

Bullion should remain supported by robust central bank purchases and physical demand.

"Absent a Black Swan (and here's hoping ‌there aren't any more) prices are likely to be ​underpinned by steady improved physical demand from India and China," said StoneX analyst Rhona O'Connell.

Continuing purchases by central banks "are sending the markets a message about managing risk, which is more important than the physical tonnage," she added.

INDUSTRIAL HEADWINDS WEIGH ON SILVER

Analysts expect silver to average $66.75 per ounce in 2027, down from this year's forecast of $70.30, but up from the current price of $53.

Silver's dual role as both a ​precious and industrial metal has left it more exposed than gold to expectations of higher-for-longer ‌interest rates, with analysts ‌citing weakening ⁠photovoltaic demand.

Substitution in manufacturing is a negative, while investment sentiment is cautious, they added, following this year's sharp price swings, including a record high of $121.60 in January.

"With solar currently oversupplied and AI under pressure, if only from a sentiment standpoint, silver is likely ‌to underperform gold," O'Connell said.

"Some ​fresh investor interest is creeping in, but the ‌big reversal in ETFs ⁠this year leaves ​the market oversupplied."

(Reporting by Noel John; additional reporting by Polina Devitt; Editing by Pratima Desai and ​Xevi Fontdegloria)

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