Gold could surge to $5,000–$5,600 per ounce and silver to $95–$120 per ounce by the close of 2026 in a bull-case scenario assigned a 25 per cent probability, according to a new report by Monarch PMS. The projections hinge on a set of macro triggers — chiefly a weakening US labour market and a pivot by the US Federal Reserve toward rate cuts.

Three Scenarios and Their Odds

Monarch PMS lays out three distinct outcomes for precious metals by year-end. The base case, carrying a 55 per cent probability, places gold in the $4,300–$4,700 range and silver at $70–$85 per ounce. This scenario assumes the Fed holds rates through September, energy prices normalise, real yields plateau, and central banks sustain purchases of roughly 250 tonnes per quarter.

The bear case, assigned a 20 per cent probability, sees gold retreating to $3,400–$3,900 and silver falling to $45–$55 per ounce — a scenario that would materialise if the Fed delivers a rate hike in September, oil prices fall further, and disinflation tips into demand weakness.

What Must Happen for the Bull Case

For the most optimistic scenario to play out, the report identifies three prerequisites: labour market deterioration that compels the Fed to ease, a resumption of institutional reallocation into precious metals, and a return of physical tightness in the silver market. All three conditions must align simultaneously — which the report implicitly acknowledges by assigning only a one-in-four probability.

The Key Headwind: Real Yields

The report flags the 10-year TIPS real yield, currently at 2.41 per cent, as the principal obstacle for gold. 'The principal headwind is the 10-year TIPS real yield, which stands at 2.41 per cent and remains a genuine competing return to a zero-coupon asset such as gold,' the report states. As long as real yields remain elevated, the opportunity cost of holding gold stays high, capping upside.

Silver's Supply-Demand Story

Silver's structural case rests on persistent supply deficits. The report notes a sixth consecutive annual deficit, with 762 million ounces drawn from above-ground stocks since 2021 and mine supply broadly flat for a decade. 'Silver's supply-demand fundamentals also remain supportive, with a sixth consecutive annual deficit, 762 million ounces drawn from above-ground stocks since 2021 and mine supply broadly flat for a decade,' the report said.

Adding to the tightness narrative, paper claims on COMEX stand at roughly 5.6 times registered physical inventory — a ratio the firm says could amplify upside moves sharply if demand strengthens. Notably, the gold-silver ratio has risen from 46x at January's peak to around 69x currently, close to its 21st-century average, suggesting silver has given back much of its earlier outperformance and now looks relatively cheaper versus gold.

What to Watch Next

The September Fed meeting is the single most consequential near-term event for both metals. A hold keeps the base case intact; a cut would fuel the bull case; a hike would validate the bear scenario. Investors will also be watching US jobs data in the weeks ahead, given that labour market weakness is the primary trigger for the bullish outlook. Central bank buying volumes — particularly from emerging-market central banks — will be an additional signal to track.