Björn Junker 25. March 2026
The current development of the gold price continues to cause frustration for many investors. Despite the ongoing uncertainty in the Middle East and the war involving the USA and Israel against Iran, gold has so far failed to gain lasting new momentum from these events. Instead, the market remains characterized by selling pressure. It is striking, however, that major banks have hardly revised their longer-term expectations. This is precisely where the latest update of commodity forecasts from BMO comes in.
The Canadian bank maintains its constructive view on gold and silver, even if it sees further headwinds in the short term. According to BMO’s assessment, the structural arguments for precious metals have not deteriorated. The current setback is therefore understood less as a break in the trend and more as an interruption of a larger, overarching upward picture. For the gold price, this means from the bank’s perspective: bullish momentum is paused for now, but not ended.
In the same breath, BMO makes it clear that the current situation in the Middle East does not invalidate the basic thesis for metals and mines, but actually further underscores it. Rather, the decisive factor is when the market develops enough confidence in a stabilization of the situation to take on more risk again. Until then, both gold and silver are likely to remain sensitive to shifts in sentiment.
Gold Price Remains Under Pressure, BMO Nevertheless Raises Forecasts
BMO’s revised forecasts show that the bank expects gold prices to remain at high levels despite the recent weakness. For the third quarter, it expects an average gold price of around $4,800 per ounce. This is 7% above the previous estimate. For the fourth quarter, BMO assumes an average of $4,900 per ounce, which represents an upward revision of 9%.
Expectations for the full year 2026 were also raised. BMO now sees the gold price at an annual average of $4,846 per ounce, after previously setting it at $4,550. The long-term view is even more pronounced: for 2027, the bank expects a gold price consistently above $5,000 and an annual average of $5,125 per ounce. This corresponds to a 26% increase compared to the earlier forecast.
BMO is thus making it clear that the bank classifies the current headwind as temporary. Although the gold price is suffering in the short term from changed economic conditions, the longer-term drivers remain intact in the view of the analysts. Diversification, currency devaluation, and de-dollarization are cited as the primary factors. According to the bank’s assessment, these factors remain the supporting pillars of the long-term gold outlook.
BMO Sees Potential in Silver, but Also Greater Volatility
In addition to the gold price, silver also remains positively positioned in BMO’s updated estimates, albeit with significantly more caution. While the bank is also raising its price forecasts here, it emphasizes at the same time that silver is likely to fluctuate more strongly than gold. For the third quarter, BMO expects an average silver price of $70.60 per ounce. This represents a 28% increase over the previous estimate. For the fourth quarter, the bank expects an average of $68.10 per ounce, which is 31% more than before.
For the full year 2026, BMO sees the silver price at an average of $74.50 per ounce, which is 32% above the previous forecast. At the same time, the bank suggests that this year could mark the peak. For 2027, it expects an average price of $64.20 per ounce. Although this is also 42% above the earlier estimate, it simultaneously signals a lower level than in 2026.
The reason for this more cautious stance lies in the different market structure of silver. While gold is seen more as a monetary and strategic hedging asset, silver is more dependent on industrial demand. This is precisely where BMO sees risks. According to the bank’s assessment, the war in the Middle East is likely to dampen global economic activity, which could weigh on industrial silver demand. At the same time, BMO expects the physical silver market to return to a surplus. This could take the pressure off the price increases that were recently driven strongly by liquidity.
Retail Flows and ETF Inflows Remain Decisive for Gold
In the short-term picture, BMO points particularly to the role of private investors. According to the bank’s assessment, at least 60% of inflows into gold ETFs come from retail investors. This gives the psychology of this investor group a significant influence on the gold price. Momentum and changes in sentiment could play a larger role in the coming months than usual, especially following the outbreak of the Iran conflict.
BMO points out that historically, gold has often performed better in the first weeks of major conflicts than was the case this time. However, the starting position today is different from earlier phases. The gold price has already risen sharply over the past two years, supported by significant new capital inflows of both a speculative and strategic nature. This makes a direct repetition of old patterns more difficult.
This is precisely why the market remains vulnerable to disappointment. From BMO’s perspective, it will likely take some time before current sellers become buyers again. A prerequisite for this could be an easing of the conflict. Until then, the gold price remains in a tension field between an intact long-term thesis and fluctuating short-term sentiment.
Gold Remains BMO’s Preferred Precious Metal Asset
Despite the fundamentally positive view on hard assets for 2026, it is noticeable that BMO clearly differentiates within the precious metals sector. The bank continues to see gold as the preferred asset, while the “smaller” precious metals are not considered equivalent substitutes. Accordingly, it expects the discount of silver compared to gold to even widen further in the current year.
This is an important point for classification. For BMO, the gold price is at the center of the long-term precious metals thesis. Silver remains part of this positive view, but is more closely tied to the economy, industry, and market volatility. Gold, on the other hand, continues to be viewed primarily through its role as a strategic asset. This is exactly why BMO is sticking to a positive gold forecast despite ongoing disappointment in the market.
The bottom line of the updated assessment is therefore: in the short term, gold and silver remain vulnerable to weakness, but the bank does not yet see the larger movement as having ended. From BMO’s perspective, the long-term foundation for the gold price remains clearly viable, even if the market is currently still waiting for a signal that could trigger new purchases.
Source: https://goldinvest.de/en/gold-iran-war-only-a-pause-in-the-upward-trend/
