Despite gold’s recent slump, CIBC Capital Markets still expects the yellow metal to reach new heights this year, with prices averaging $3,600 per oz. in the second half.
Behind the bullish forecast is “a banquet of uncertainty around the world” boosting the appeal of alternative reserve assets, according to analysts led by Anita Soni.
Amongst the key drivers cited by Soni’s team are expectations for lower interest rates, geopolitical uncertainty and continued stockpiling by central banks.
“We continue to expect a positive macroeconomic setup for gold,” Soni wrote in a report last week. “We believe [U.S.] rate cuts are likely and it’s a matter of ‘when and how fast’, and not ‘if.’”
“Geopolitical tensions in the Middle East and Russia remain elevated,” she added. “All this uncertainty has led to the acceleration of de-dollarization, supporting gold prices.”
Further upside
Gold, seen as the ultimate safe-haven asset during uncertain times, has climbed by nearly 30% this year amid rising global trade tensions. In April, the metal soared to a record of $3,500 per ounce.
CIBC’s gold forecast would represent another 3% upside to the all-time peak. In December 2024, the team led by Soni predicted prices to average $2,800 this year, which has been easily surpassed.
Moreover, Soni expects the $3,600 average gold price forecast to remain through next year, before pulling back to around $3,300 in 2027 and $3,000 in 2028.
With a fresh gold outlook, the CIBC analysts also boosted their price targets for a basket of Canadian gold mining stocks, including Agnico Eagle Mines (TSX: AEM), Kinross Gold (TSX: K), Alamos Gold (TSX: AGI), Franco-Nevada (TSX: FNV) and Discovery Silver (TSX: DSV).
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