During the U.S. afternoon session on Thursday, both gold and silver prices rose, with silver showing particularly strong performance. This upward movement occurred after Federal Reserve Chairman Jerome Powell delivered somewhat hawkish monetary policy remarks on Wednesday afternoon, which initially led to a pullback in precious metal prices before the market rebounded. Specific data showed that December gold futures rose by $13.20 to $4,014.20 per ounce, while December silver futures increased by $0.717 to $48.63 per ounce.
Although the Federal Open Market Committee, as widely expected by the market, lowered the target range for the federal funds rate by 0.25%, internal opinions were divided. Powell clearly stated that another rate cut in December is not a certainty and advised investors to lower their expectations for a rate cut at that time. This hawkish stance led to a rise in U.S. Treasury yields and diminished market expectations for a December rate cut. Reports indicate that within the Fed, concerns about a cooling labor market coexist with worries about persistent inflation, and the suspension of economic data releases during the government shutdown has further intensified policy disagreements.
Meanwhile, central banks continue to increase their gold holdings, becoming a significant force supporting the market. According to a World Gold Council report, global central banks purchased 220 tonnes of gold in the third quarter, a 28% increase from the previous quarter; over the year through September, total central bank gold reserves increased by 634 tonnes. Despite gold prices being at historically high levels, some returning buyers continue to purchase, betting on gold’s value as a hedge against a weak U.S. dollar. The World Gold Council forecasts full-year gold purchases for 2025 to be between 750 and 900 tonnes, noting that geopolitical tensions, inflationary pressures, and trade policy uncertainties are the main factors driving safe-haven demand.
The World Bank has made specific forecasts for the price trends of gold and silver. The institution expects gold prices to hit a new high in 2026, with an average price of approximately $3,575 per ounce, but the increase will be only 5%, a sharp contrast to this year’s 50% surge. For silver, the average price in 2026 is projected to reach $41 per ounce, a 7.9% increase from current levels. However, this upward trend may end in 2027. The World Bank predicts that the average gold price in 2027 will fall back to about $3,375 per ounce, while the average silver price will drop to about $37 per ounce, declining by over 5% and nearly 10% respectively compared to the previous year.
World Bank analysts pointed out that the recent rise in gold prices is mainly driven by investment demand, supported by geopolitical tensions, macroeconomic concerns, and policy uncertainties, with a weakening U.S. dollar and accommodative monetary policies also reinforcing this trend. Compared to the gold price surge in 1979-1980, current inflationary pressures and energy market turbulence are less severe, but central bank gold purchasing has reached unprecedented levels. Although prices may face selling pressure in 2027, the World Bank still believes gold prices will remain at relatively high levels, with gold and silver prices in 2026 expected to be more than 180% higher than the 2015-2019 average.
The World Bank holds a relatively optimistic view on the silver market, believing that its investment and industrial demand will continue to drive price increases, especially in areas such as renewable energy and semiconductor production. Although the overall outlook is cautious, the institution also notes that there are upside risks to the forecast. If geopolitical tensions escalate again or unexpected financial volatility occurs, it could trigger more safe-haven capital inflows, pushing gold and silver prices beyond current expectations. On the other hand, if geopolitical situations ease or monetary policy turns hawkish, it could simultaneously pressure the safe-haven and investment demand for gold and silver.
