Monarch PMS Projects Gold to Reach $4,700 an Ounce by End-2026 Under Base Case

Monarch PMS has outlined its market projections for gold and silver, expecting gold to trade between $4,300 and $4,700 an ounce and silver at $70 to $85 an ounce by the end of 2026. This base-case scenario, assigned a 55 per cent probability, is built on specific macroeconomic assumptions.

The framework assumes that the US Federal Reserve will hold interest rates steady through September, that energy prices will normalise, and that real yields will plateau. Additionally, the projection factors in continued central bank purchases averaging about 250 tonnes a quarter.

Alongside the base case, Monarch PMS has evaluated bear and bull scenarios. The bear case, carrying a 20 per cent probability, estimates gold at $3,400 to $3,900 an ounce and silver at $45 to $55 an ounce. This outcome would be triggered if the US Federal Reserve implements a rate hike in September, oil prices decline further, and current disinflation transitions into broad demand weakness.

Conversely, the bull case has been assigned a 25 per cent probability. Under this scenario, gold could reach $5,000 to $5,600 an ounce, and silver could climb to $95 to $120 an ounce. This would occur if labour market weaknesses force the Fed to ease repo rates, real yields roll over, institutional capital reallocates into precious metals, and physical tightness returns to the silver market.

According to the valuation framework provided by Monarch PMS, gold's modelled value ranges from $3,248 to $4,595, featuring a $3,922 midpoint. Silver's modelled range stands at $54 to $77, with a midpoint of $65. The firm noted that gold's June low of $3,985 was within approximately 2 per cent of its modelled midpoint, whereas silver traded below its midpoint at $61.7, positioning silver as the relatively cheaper asset within this framework.

Silver's underlying supply and demand fundamentals continue to show support, marked by a sixth consecutive annual deficit. Data indicates that 762 million ounces have been drawn from above-ground stocks since 2021, while mine supply has remained broadly flat over the past decade. With paper claims on COMEX standing at approximately 5.6 times registered physical inventory, Monarch PMS anticipates that physical tightness could amplify upward price movements if demand strengthens.

Furthermore, the gold-silver ratio has normalised, moving from 46 times at the peak in January to approximately 69 times, which is close to its 21st-century average. With Monarch PMS utilising a benchmark of 60 times for its model, silver has surrendered much of its earlier outperformance, making it appear relatively more affordable than gold at current levels.

"Monarch PMS's structured approach to forecasting commodity prices through probability-weighted scenarios offers a realistic framework for market participants. By evaluating the interplay between central bank policies, real yields, and specific supply-demand deficits in metals like silver, businesses and investors can better manage risk and capital allocation in a volatile macroeconomic environment. Understanding these underlying valuation anchors is essential for long-term financial planning." — Dr. Shishir Gupta, Founder & CEO, StartupLanes