BMO supports a prolonged gold bull market: the rally is only a pause, and next year it will stay above $5,000

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Source: Zhiting Finance

In a report on Tuesday, BMO analysts said that due to changes in the economic outlook triggered by the Middle East war, gold and silver prices may continue to move lower, but the upward momentum is only temporarily paused and has not been reversed. The firm has raised its gold price forecasts for the second half of this year and for year-end.

“Iranian conflict has not weakened the structural factors behind metals and mining; instead, it has strengthened their importance. The question is when the market can develop enough confidence in the resolution of the conflict, so that it can once again increase risk exposure,” BMO Bank wrote.

The bank set its average third-quarter gold price forecast at $4,800 per ounce, 7% higher than its previous estimate; its average fourth-quarter gold price forecast at $4,900 per ounce, 9% higher than the prior forecast; and its full-year average price forecast at $4,846 per ounce, up from $4,550 in the previous forecast. BMO also remains optimistic about gold’s outlook in 2027, expecting the gold price to stay above $5,000, with an annual average of $5,125, which is 26% higher than its earlier forecast.

The bank is also bullish on silver, but believes this year may be the peak for silver prices. It forecasts that the average silver price in 2026 will be $74.50 per ounce, falling next year to an average of $64.20 per ounce.

“We believe the logic behind gold’s long-term bull market still holds—diversification, currency debasement, and de-dollarization—but we may have to wait until after the conflict is resolved before sellers can turn back into buyers,” BMO wrote.

On Tuesday, gold and silver closed with little change. New York Mercantile Exchange gold futures for March delivery fell 0.1% to $4,399.30 per ounce, marking the fifth consecutive trading day of declines; while New York Mercantile Exchange silver futures for March delivery rose 0.3% to $69.274 per ounce, ending the prior nine straight trading days of losses during which the nearby contract had cumulatively fallen by more than 22%.

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Byline: Zhu Henan