OCBC has lowered its price targets for gold and silver through the end of 2026, pointing to a more challenging macroeconomic environment driven by higher real interest rates, a firmer U.S. dollar and weaker investor appetite. Despite the downgrade, the bank continues to see favourable long-term prospects for both precious metals.
Lower price targets reflect short-term headwinds
The Singapore-based lender reduced its end-2026 forecast for gold (USD/XAU) to US$4,360 per ounce from US$5,100, while its silver (USD/XAG) forecast was cut to US$67 per ounce from US$89.50.
According to OCBC, the revisions reflect a more difficult short-term backdrop rather than a fundamental shift in its positive long-term outlook for the sector.
Rising yields and stronger dollar pressure bullion
The bank said the revised forecasts follow a sharp increase in real interest rates, renewed strength in the U.S. dollar and increasingly hawkish expectations for Federal Reserve policy, factors that have reduced the attractiveness of non-yielding assets such as gold.
OCBC now expects gold to average US$4,180 per ounce by September 2026 before recovering gradually to US$4,820 by September 2027. Silver is projected to rise from US$64 per ounce to US$74 over the same period.
Precious metals remain under pressure
Gold prices extended recent losses on Tuesday, with spot gold falling 0.7% and gold futures declining 1%. Silver dropped 1.4%, while platinum slipped 1%.
Structural drivers remain supportive over the longer term
Although the bank reduced its forecasts, it said the medium-term outlook for gold continues to be supported by central bank diversification, geopolitical uncertainty, fiscal concerns and demand for portfolio hedges.
However, OCBC cautioned that these long-term themes may not be sufficient to offset the short-term impact of elevated real yields and weaker inflows into exchange-traded funds.
The bank added that gold remains particularly exposed while markets continue to reprice expectations for higher U.S. interest rates, drawing comparisons with the 2013 “taper tantrum,” when rising real yields triggered a sharp correction in bullion before the Federal Reserve actually began increasing rates.
Silver outlook remains positive despite near-term challenges
OCBC also maintained a constructive long-term view on silver, citing ongoing structural supply deficits and sustained industrial demand linked to solar energy, electrification and electronics.
Nevertheless, the bank said these supportive factors are currently being outweighed by softer ETF demand, higher real yields and weaker investor sentiment, leaving silver more vulnerable to macroeconomic-driven corrections.
Looking ahead, OCBC said weaker U.S. inflation, softer labour market data or a more dovish Federal Reserve could improve the outlook for both metals. By contrast, resilient economic growth and persistent inflation could keep real yields elevated and postpone a sustained recovery in gold and silver prices.