The gold price set a technical signal last week while providing fresh fuel for the debate over its future direction. After the precious metal found support at its 200-day moving average, it ended a three-week losing streak. This recovery continued with follow-up buying at the start of the week. This brought the question to the fore of whether the weaker performance in March was a temporary phase rather than the start of a permanent change in direction.
For Commerzbank, the answer is clear: in the analysts’ view, gold’s price development in March does not fit the overall fundamental picture. The institution is therefore sticking to a positive outlook for the gold price and recently raised its forecasts for precious metals. Accordingly, gold is expected to end the current year at around $5,000 per ounce. Previously, the estimate stood at $4,900. For the end of 2027, the bank expects a further increase to $5,200 per ounce.
Gold price between technical stabilization and macroeconomic headwinds
ZodiacThe recent recovery in the gold price is remarkable against the backdrop of a difficult market environment. In recent weeks, the precious metal has faced several headwinds. These include rising bond yields, a stronger US dollar, and shifting interest rate expectations. Higher interest rates typically act as a drag on gold in particular, as the metal itself does not yield any ongoing returns. When capital market interest rates rise, the opportunity cost disadvantage of gold increases.
Additionally, according to Commerzbank’s assessment, the consequences of the war in Iran caused new tensions in the energy markets. The resulting disruptions to global supply chains drove oil prices noticeably higher. Higher energy prices, in turn, heighten inflation expectations. This is precisely what led many market participants to assume recently that the US Federal Reserve would have to maintain a neutral monetary policy stance instead of continuing to cut interest rates quickly.
This was an unfavorable mix for the gold price. On the one hand, gold is considered a monetary store of value and a safe haven. On the other hand, it suffers when the market expects higher or longer-term elevated interest rates due to rising inflation. This exact tension characterized the market in recent weeks and helped explain why gold did not benefit more from classic safe-haven buying despite the geopolitical situation.
Commerzbank expects falling real interest rates to be a driver
From Commerzbank’s perspective, however, this picture is likely to change as the year progresses. The bank assumes that the war in Iran will end before the summer. In such a scenario, markets would have to re-evaluate their expectations for monetary policy. Analysts expect the US Federal Reserve to resume its rate-cutting cycle at the end of this year and lower the key interest rate by a total of 75 basis points by the middle of next year.
At the same time, the bank expects US inflation to remain above the official inflation target next year. For the analysts, this leads to a central point: if nominal interest rates fall while inflation remains elevated, real interest rates will come under pressure. This would be exactly the kind of environment that could support the gold price, as the opportunity cost of holding gold decreases in a long-term comparison.
This also explains why Commerzbank is sticking to its positive stance despite the setback of the past two months. From its perspective, the decisive factor is not just the short-term price movement, but the monetary policy and real economic framework in which gold operates. If the interest rate landscape does indeed shift in the expected direction, the upward trend—which has only been slowed down recently—could reassert itself more clearly.
Why gold is reacting differently as a safe haven this time
According to the analysis, the most remarkable thing about the current market phase is the nature of the crisis. Gold has not lost its role as a safe haven, but the market’s reaction this time is different than in previous periods of stress. In crises dominated by economic risks, investors often expect expansive monetary policy and falling interest rates. Such constellations were observed, for example, during the financial crisis or the pandemic. In these phases, gold usually benefits particularly strongly.
In the current environment, by contrast, the inflation shock is more prominent. When investors primarily expect inflationary pressure and more restrictive monetary policy, the classic flight reflex in favor of gold is weaker. In this context, Commerzbank also points out that even the Swiss franc, normally another classic safe haven, has recently been among the weaker currencies in the G10 universe. For the gold price, this means that the safety function remains fundamentally intact, but it is being overshadowed in the short term by the interest rate and inflation debate.
In addition to gold, Commerzbank is also maintaining a positive outlook for silver. The precious metal has also performed cautiously of late, although fundamental data continues to point to a tight market in the bank’s assessment. The forecast sees silver at $90 per ounce by year-end and $95 per ounce by the end of 2027. In doing so, the bank is signaling that it expects further upside potential not only for the gold price but for precious metals as a whole, based on the underlying market data.
