Gold, Silver price outlook: US Federal Reserve Chairman Kevin Warsh dealt a blow to the precious metals market’s lofty expectations on Friday, triggering a sharp reversal in gold and silver prices after his speech at the central bankers’ gathering in Jackson Hole.
The pressure on precious metals continued into Tuesday as investors weighed the implications of escalating tensions in the Middle East and awaited key US labour market data due later this week.
Spot gold was down 0.4% at $4,428.54 per ounce by 0432 GMT, after falling to its lowest level since August 19 during the previous session. US gold futures edged 0.1% lower to $4,477.20, while spot silver slipped 0.2% to $66.42.
The weakness was also visible in domestic commodity markets. MCX gold declined 0.3% to ₹153,997.00 per 10 grams. MCX Silver initially fell 0.1% to ₹233,501.00 per kg before recovering and rising 1% to ₹235,800.00 per kg.
Why Are Gold and Silver Prices Under Pressure?
The sharp change in sentiment followed Warsh’s hawkish remarks at the Jackson Hole symposium in Wyoming last Friday. His comments strengthened concerns that the US Federal Reserve could raise interest rates if inflation does not move back towards its 2% target.
Last week, before the sell-off, spot gold had climbed to its highest level in more than three months. However, prices tumbled 3% on Friday after Warsh said the Fed would “have work to do” if policymakers failed to gain the confidence required to ensure inflation was heading towards 2%.
His remarks pushed bond yields higher and weighed on gold prices. Traders currently see a 66% probability of a US rate hike in September and an 89% probability in December, according to the CME FedWatch Tool.
Gold has also faced pressure from fresh tensions in the Strait of Hormuz. The conflict has pushed oil prices higher and increased inflationary expectations, adding another layer of concern for bullion investors.
US President Donald Trump told reporters in the Oval Office that he has a lot of respect for Warsh and that “he’ll do what he has to do” on interest rates. Meanwhile, Trump threatened further strikes against Iran on Monday after the first exchange of direct attacks in a month, raising tensions in a conflict that had recently shifted into an economic standoff. Oil prices rose for a second consecutive session.
Gold, Silver Outlook
Gold and silver have witnessed sharp swings in recent sessions, keeping investors focused on where prices could head next. While the outlook for the two precious metals remains influenced by several global and domestic factors, analysts have laid out different scenarios and price targets for gold and silver by the end of 2026.
Carsten Menke, Head Next Generation Research at Julius Baer, believes the outlook remains stronger for gold than for silver.
“In our view, the case for gold is still clearer than the case for silver. Gold benefits from central bank buying as a strong structural source of demand, which silver does not share. In contrast, silver is still feeling the after-effects of the speculation-fuelled frenzy, which could be keeping investors on the sidelines after many of them suffered steep losses. We also expect industrial silver demand to soften. A shift to cheaper alternatives, such as aluminium and copper, has started, and the growth outlook for Chinese solar module makers, which are the biggest industrial users of silver, is not as strong anymore.
We thus reiterate our Constructive view on gold. At the same time, we remain Neutral on silver and stick to our long position in the gold/silver ratio. Volatility is likely to stay elevated, reflecting surprises in US economic data and the fact that the Fed is providing much less forward guidance under its new chairman,” Menke said.
Gold, Silver price targets
Meanwhile, in a recent report, Monarch PMS laid out three possible scenarios for gold and silver prices by the end of 2026, assigning different probabilities to its base, bear and bull cases.
Under its base-case scenario, which has a 55% probability, Monarch PMS expects gold to trade in the range of ₹1,31,170 to ₹1,43,372 per 10 grams and silver at ₹2,13,543 to ₹2,59,302 per kilogram by the end of 2026. This outlook assumes that the US Federal Reserve holds rates through September, energy prices normalise, real yields plateau and central banks continue purchases of around 250 tonnes a quarter.
The bear case has been assigned a 20% probability. Under this scenario, gold could fall to ₹1,03,737 to ₹1,18,992 per 10 grams, while silver could trade between ₹1,37,282 to ₹1,67,790 per kg. The scenario assumes that the Fed delivers a rate hike in September, oil prices decline further and disinflation turns into demand weakness.
The most optimistic scenario is Monarch PMS’s bull case, to which it assigns a 25% probability. Under this scenario, gold could rise to ₹1,52,554 to ₹1,70,861 per 10 grams, while silver could reach ₹2,89,853 to ₹3,66,130 per kg. This would require weakness in the labour market to force the Fed to ease repo rates, a rollover in real yields, renewed institutional allocation towards precious metals and a return of physical tightness in silver.
Silver’s supply-demand dynamics also remain supportive, according to Monarch PMS. The metal is facing a sixth consecutive annual deficit, while 762 million ounces have been drawn from above-ground stocks since 2021. Mine supply, meanwhile, has remained broadly flat for a decade.
The firm’s valuation framework provides an additional reference point for these scenarios. Monarch PMS places gold’s modelled value in the range of ₹99,098 to ₹140,195, with a midpoint of ₹1,19,661. For silver, the modelled range stands at ₹1,64,756 to ₹234,929, with a midpoint of ₹1,98,023.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
