After an exceptional year for precious metals – with the gold price up by more than 65% and silver up by over 100% – the Canadian bank BMO Capital Markets expects the upward trend in gold to continue in 2026. Although gold and silver are trading at or near record levels, the analysts still see room for improvement – with a clear preference for gold over the other precious metals.
Gold in focus: BMO raises price forecast for 2026
In its official commodity outlook for 2026, BMO assumes that gold will reach its annual highs in the first half of the year. The analysts now expect an average gold price of $4,600 per ounce in the first half of the year – around 5% more than in the previous estimate. For the year as a whole, the bank expects an average of $4,550 per ounce, which corresponds to an increase in the previous forecast of around 3%.
BMO is thus signaling that, in its view, the current gold cycle is not yet complete. After a year with a price increase of around 65% and almost 50 registered all-time highs, the analysts see the bull market as advanced, but not exhausted. Gold will remain the preferred precious metal in the sector in 2026.
Silver: More cautious assessment after rally of over 100%
While gold is likely to remain the focus in 2026 according to BMO, the outlook for silver is more differentiated. The bank expects an average price of around $60 per ounce for silver in the fourth quarter of 2026 – which should also mark the high for the year. On an annual average, BMO calculates with $56.30 per ounce.
It is worth noting that these forecasts are below the current spot prices: silver is currently trading above $65 per ounce. BMO has significantly raised its silver forecast for 2026 by 14%, but at the same time warns of overbought tendencies in silver and also in platinum. Both metals have shown very strong development in recent weeks, while the supply deficits, according to the bank’s updated models, are becoming smaller.
The analysts attribute the strong demand for silver primarily to two factors: firstly, the ‘debasement trade’ thesis, in which investors switch to tangible assets such as precious metals, and secondly, increased stockpiling in the USA since silver was classified as a ‘Critical Mineral’. In phases of tight markets, silver can behave similarly to gold – and even show stronger upward spikes in rallies. However, BMO sees less scope for silver and platinum in 2026 than for gold.
Macro drivers: Interest rate turnaround, weaker dollar and ‘de-dollarization’
The core of the BMO forecast remains the macroeconomic support for gold. The analysts expect the US Federal Reserve to continue to cut interest rates next year. Falling US interest rates generally relieve the burden on the US dollar and lower real returns – an environment in which gold as a non-interest-bearing investment has historically often been able to gain ground.
BMO points out that the US dollar remains susceptible to the so-called ‘debasement’ thesis due to the high level of national debt, i.e. the concern about a creeping devaluation of the leading currency. Against this backdrop, the analysts continue to see gold as an important hedging instrument against growing currency and debt risks.
At the same time, they point to a structural change in the role of gold in the global financial system. The bank speaks of a ‘new era for gold’, in which other demand factors than before dominate. Two forms of ‘de-dollarization’ are at the heart of this:
Geopolitical de-dollarization: States and institutions are reducing their dependence on the US dollar in order to protect themselves against possible sanctions or to be less dependent on the US payment system. Purchases of gold by central banks – for example in emerging markets – are a central component of this strategy.
Hedging de-dollarization: Investors are reacting to the rising national debt and the risk of monetary devaluation by using gold as a hedge against long-term loss of purchasing power.
The analysts interpret the strong resilience of the gold price after temporary setbacks in October as a sign that gold has not lost its function as a diversification instrument and ‘safe haven’.
Gold as a stability anchor in the multi-asset portfolio
Against this backdrop, gold retains a central role for BMO in tactical asset allocation. The bank expects gold to continue to outperform US government bonds and the US dollar until the end of 2026. In recent months, it has been shown that gold can make a stabilizing contribution even in an environment of weak bond markets and a US currency under pressure.
From the analysts’ point of view, the multi-year upward trend in the gold market remains intact: In the short term, inflation concerns and economic uncertainties are driving prices, while in the long term the expectation of continued monetary devaluation dominates. In addition, the share of gold in the total volume of global financial assets remains relatively low despite the rally – which, from the perspective of many market observers, opens up additional scope for reallocations towards gold.
BMO remains fundamentally positive on silver, platinum and other precious metals, but with a clear focus on gold as the leading precious metal of the current cycle. Silver could react disproportionately in phases of tight supply and high investor demand, but after doubling in price in the current year, it is already showing stronger signs of exaggeration.
