Gold Could Reach $5,600 as Fed Rate Cuts Fuel Bull Market

Monarch PMS recently released a report predicting gold and silver prices for various scenarios. The bull case, which has a 25% probability, suggests that gold could reach $5,000-$5,600 per ounce and silver to $95-$120 in the coming months. This scenario assumes a weakening labour market will force the Fed to ease repo rates and real yields roll over.

The report also outlines two other scenarios: the base case, which has a 55% probability, predicts gold at $4,300-$4,700 per ounce and silver at $70-$85 by end-2026. In this scenario, the Fed holds rates through September, energy prices normalize, real yields plateau, and central banks maintain purchases of around 250 tonnes a quarter.

The bear case, with a 20% probability, sees gold at $3,400-$3,900 per ounce and silver at $45-$55 if the Fed delivers a rate hike in September, oil falls further, and disinflation turns into demand weakness.