ING has cut its gold and silver price forecasts as rising U.S. bond yields and a strengthening dollar pressure precious metals markets. Gold prices have dropped below $4,000 an ounce, marking a new low for the year, while silver has fallen below $60 an ounce. The selloff represents a bear-market correction from record highs reached in January. Ewa Manthey, commodity analyst at ING, attributed the decline to markets shifting focus toward higher interest rates and tighter financial conditions. The downturn highlights how elevated yields and dollar strength have overshadowed traditional safe-haven demand for precious metals.
Federal Reserve Signals Support for Rate Hike
Markets continue to react to the Federal Reserve's recent monetary policy meeting. The central bank left interest rates unchanged but signaled support for a rate hike this year. Federal Reserve Chair Kevin Warsh emphasized that price stability remains his top priority. Markets are pricing in a rate hike as early as September, with growing expectations of a second increase by December. The market's aggressive tightening expectations have pushed the U.S. Dollar Index back above 100 points. The index is currently trading at 101.69, its highest level since May 2025.
ING Lowers Gold and Silver Price Forecasts
Given the growing headwinds for gold, ING is lowering its gold price forecast for the second half of the year. Manthey stated, "While we remain constructive on gold over the medium term, the near-term environment has become more challenging." ING now sees gold prices averaging $4,300 an ounce in the third quarter of 2026 and $4,600 an ounce in the fourth quarter, down from previous forecasts of $4,850 and $5,000, respectively. Although ING does not expect the Federal Reserve to raise rates this year, Manthey suggested that investors shouldn't fight the market. "Elevated yields and a strong dollar are likely to remain near-term headwinds for gold," she said. "Geopolitical tensions have failed to generate the type of safe-haven inflows seen during previous periods of uncertainty. Instead, markets have focused on the inflationary implications of geopolitical developments and what they could mean for monetary policy."
ING is also downgrading its silver price forecast. The investment firm expects silver to average $68 an ounce in the third quarter and $74 an ounce in the fourth quarter, down from previous forecasts of $79 and $84, respectively.
Silver Demand Drivers Weaken
"While the silver market is expected to remain in deficit, some of the strongest demand drivers are becoming less supportive. Growth in solar demand is slowing, while continued thrifting and substitution in photovoltaic manufacturing are reducing silver intensity per panel," Manthey said.
Structural Fundamentals Remain Intact
Although gold and silver face a challenging environment through the second half of the year, Manthey said the market's structural fundamentals remain intact. "Central bank demand remains robust, reserve diversification continues, and geopolitical risks remain elevated. However, higher yields and weaker investor demand are proving to be more powerful headwinds than we previously anticipated. Gold's correction has prompted a reset in our forecasts, but not in our broader view of the market," she said. "We continue to believe the structural drivers supporting gold remain intact, though the path higher is likely to be slower and more volatile than we previously expected. Despite the downgrade, we continue to expect silver to modestly outperform gold, supported by ongoing market deficits and broader electrification trends."
FAQ
What did ING do with its gold and silver forecasts?
ING lowered its gold price forecast to $4,300 an ounce for the third quarter of 2026 and $4,600 an ounce for the fourth quarter, down from previous forecasts of $4,850 and $5,000. The firm also cut its silver forecast to $68 an ounce for the third quarter and $74 an ounce for the fourth quarter, down from $79 and $84.
Why did gold and silver prices fall?
Gold and silver prices fell due to rising U.S. bond yields and a strengthening dollar. Markets shifted focus toward higher interest rates and tighter financial conditions following the Federal Reserve's signals of support for a rate hike this year. The U.S. Dollar Index reached 101.69, its highest level since May 2025.
What factors are affecting silver demand?
Growth in solar demand is slowing, and continued thrifting and substitution in photovoltaic manufacturing are reducing silver intensity per panel. Despite the silver market remaining in deficit, these demand drivers are becoming less supportive.
