Monarch PMS Forecasts Gold to Reach $5,600 and Silver to $120 by Year-End

Monarch PMS, a wealth management firm, has released its outlook for gold and silver prices by the end of this year. In their base-case scenario, they predict gold could reach $4,300-$4,700 an ounce and silver $70-$85 an ounce.

This scenario assumes the US Federal Reserve holds interest rates through September, energy prices normalize, real yields plateau, and central banks continue buying around 250 tonnes of gold a quarter. The firm assigned a 55% probability to this base case.

In their bull-case scenario, Monarch sees significant upside, with gold potentially reaching $5,000-$5,600 an ounce and silver at $95-$120 an ounce by year-end. This would require weakness in the labour market to push the Federal Reserve towards easing, triggering a rollover in real yields.

The firm also identified real yields as the principal headwind for gold, with higher real yields making interest-bearing assets more attractive relative to gold. A sustained rollover in real yields could strengthen the case for gold and other precious metals.