June 5, 2026
Although the war in Iran, a simmering energy crisis, and rising inflation should actually provide the perfect environment for safe-haven assets, gold is currently treading water below the $4,500 per troy ounce mark. For commodity investors, this behavior seems like a paradox. But according to a recent analysis by Commerzbank, there is a clear reason for this: a shift in U.S. interest rate expectations. For forward-thinking investors, this means: The next upward surge in gold prices hasn’t been canceled—it’s merely being postponed.
The interest rate shock: Markets are pricing in surprise hikes
The explanation for the current price slowdown lies in the monetary policy of the U.S. Federal Reserve (Fed). Even before the outbreak of the conflict in the Middle East, the market had anticipated interest rate cuts of around 50 basis points this year. However, the war-driven rise in oil prices has shattered these expectations.
A look at Fed funds futures reveals the turnaround: The market now signals a U.S. benchmark interest rate of about 3.8 percent by year-end. Since the effective Fed rate currently stands at just over 3.6 percent, market participants are effectively pricing in an imminent rate hike. The CME FedWatch Tool puts the probability of a rate hike in December at over 50 percent. By spring 2027 at the latest, the market has fully priced in a 25-basis-point increase. These higher opportunity costs are weighing heavily on the gold price in the short term.
The Commerzbank Scenario: 8 Percent Upside Potential by Year-End
Despite these headwinds, Commerzbank sees attractive potential but is adjusting its timing. While the year-end target for gold has been lowered from $5,000 to $4,800, this still represents a solid increase of around 8 percent from current levels.
The analysts’ base scenario assumes a two-month geopolitical transition phase. After that, the bank expects the Strait of Hormuz to reopen. The logical consequence: falling prices for Brent crude oil, easing inflationary pressure, and a retreat from the currently aggressive interest rate expectations.
Of interest to investors: Contrary to the current market positioning, Commerzbank does not believe there will be a real key interest rate hike this year. Instead, the experts expect interest rates to remain unchanged and see the next real monetary policy move as a cut—but not until the second quarter of 2027 at the earliest.
The fundamental drivers remain strong (2027 target: $5,200)
Because the overarching macro picture remains intact, Commerzbank is sticking firmly to its long-term forecast of $5,200 per troy ounce by the end of 2027. The time lag does not alter the massive structural drivers:
- The rampant and rapidly growing U.S. national debt is forcing monetary policy that is too loose relative to inflation.
- Dwindling confidence in the U.S. dollar as a reserve currency continues to fuel central bank gold purchases.
- The strategic interest of private and institutional investors in tangible assets remains consistently high.
Silver in the wake: Industrial weakness weighs on the price
In parallel with gold, the bank has also adjusted its expectations for silver. The year-end target has been revised to around $80 per troy ounce. In addition to the subdued gold price, weakening physical demand is the primary factor weighing on prices here.
The Silver Institute expects industrial demand for silver to shrink for the second year in a row and reach a four-year low. Nevertheless, the fundamental supply-demand balance in the silver market remains tight. Consequently, Commerzbank expects prices to rise again in the coming year and forecasts a silver price of around $90 per troy ounce by the end of 2027 (previously $95).
Conclusion: According to the bank’s outlook, major price surges for both gold and silver are being pushed back in time. However, since the long-term fundamental arguments remain strong, the current consolidation phase could offer strategic investors an attractive entry opportunity before the interest rate turnaround actually takes effect.
Source：https://goldinvest.de/en/gold-price-rally-merely-postponed-analysts-predict-usd4-800-by-year-end
