Monarch PMS Forecasts Bullish Gold and Silver Prices by Year-End

A new report from Monarch PMS has painted a bullish picture for gold and silver prices by year-end. The bull case, which carries a 25% probability, predicts that gold could reach $5,000-$5,600 per ounce and silver $95-$120 per ounce.

The scenario assumes weakness in the labor market, forcing the Federal Reserve to ease repo rates and real yields roll over. Additionally, institutional investors must continue to reallocate into precious metals, and physical tightness in silver should return for the bull case to materialize.

In its base case, with a 55% probability, Monarch PMS forecasts gold to trade between $4,300-$4,700 per ounce and silver at $70-$85 per ounce by year-end. This scenario assumes that the Federal Reserve 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 per ounce if the Fed delivers a rate hike in September, oil falls further, and disinflation turns into demand weakness. The report notes that the principal headwind for gold is the 10-year TIPS real yield, which stands at 2.41%.