Shah Sees 10% Gold, Silver Rally if Bond Yields Soften

Gold and silver prices may continue to rise over the next six to eight months if US bond yields soften, according to Viral Shah, President & Head-Brokerage at 360 ONE. He believes that geopolitical developments and the US approach to higher bond yields will support precious metals.

The dollar could provide another boost to commodities if it weakens further, with resistance for the dollar index seen around 100-101. This could lead to a move towards 97, supporting gold, silver, and base metals.

Viral Shah is also positive on copper and zinc, which have been in a structural bull trend for about a year due to demand from artificial intelligence (AI), data centers, and global electrification. Zinc is benefiting from supply-side concerns, particularly lower production in China following flooding, resulting in falling inventories on the London Metal Exchange.

Crude oil prices may fall another 7-8% if oil flows through the Strait of Hormuz improve and geopolitical tensions ease, according to Shah. However, he does not see this turning into a prolonged structural decline because countries will eventually need to replenish their strategic petroleum reserves.