Gold bulls are being reminded that geopolitical turmoil does not always push bullion higher. According to investingLive, inflation and interest-rate consequences can sometimes overwhelm the safe-haven bid, while the value of accumulated gold reserves may lie in their use when a shock, such as a war, hits. This is the central tension in CIBC's latest precious metals outlook.
The bank has sharply lowered its forecasts as higher energy prices, a stronger US dollar and a more hawkish Federal Reserve complicate the trade, but it still expects a substantial recovery over the next two years, as reported by investingLive. In its October report, CIBC cut its 2027 average gold forecast to US$5,200 an ounce from US$6,500. Its 2028 estimate fell to US$5,500 from US$6,000, while its fourth-quarter 2026 forecast dropped to US$4,500 from US$6,500.
Even after these revisions, CIBC remains above the consensus estimates included in the report, which stand at US$4,620 for 2027 and US$4,451 for 2028. CIBC said: "Despite this monetary policy headwind, we believe elevated geopolitical risk, fiscal concerns and continued diversification away from US Treasuries will underpin gold demand and support a recovery through 2027 and 2028." At the time of the report, gold was quoted at $4,147, more than 25% below its early-year peak near $5,600. The report describes a market in which the US-Iran conflict has supported demand for protection while simultaneously pushing oil prices and inflation expectations higher.
This has strengthened the dollar and pushed the Federal Reserve toward tighter policy, weighing on a non-yielding asset such as gold. For traders, the combination is difficult: more geopolitical risk can support gold, but another energy-price shock can also reinforce the rate expectations that are holding it back. The source indicates that inflation and growth data are therefore in sharp focus, and that a sustained recovery would be easier with some relief from real yields and the dollar.
The bullish forecasts also rely on a significant investment-demand assumption. CIBC projects gold ETF demand of 1,000 tonnes in each of 2027 and 2028, compared with 35 tonnes in 2026. It also expects central-bank purchases to reach 1,000 tonnes annually in those two years.
Silver faces an even larger near-term downgrade. CIBC cut its 2027 silver forecast to US$85 an ounce from US$120, although this remains well above the report's consensus estimate of US$66. Copper moves in the opposite direction, with CIBC raising its forecast to US$6.50 a pound for the fourth quarter of 2026 and for both 2027 and 2028.
CIBC's divergent views on the metals reflect different drivers. According to the report as summarised by investingLive, copper's upgraded outlook rests on physical demand and constrained supply, whereas gold's recovery depends more heavily on investment flows and the evolution of the monetary-policy backdrop. Source: investingLive, summarising CIBC's October 2026 precious metals outlook.
Source: investinglive.com