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Informist, Tuesday, Oct. 7, 2025

MUMBAI – Commerzbank has raised its price forecast for gold to $4,000 per ounce by the end of 2025 from its earlier projection of $3,600 per ounce as it expects the price of gold to remain well supported for now and sees potential for further upside mainly because of the expectations of significant interest rate cuts by the US Federal Reserve. The German bank has also raised its price forecast for gold to $4,200 per ounce by the end of next year from its previous expectation of around $3,800 per ounce. For silver, it has raised its forecast to $49 per ounce by the end of 2025 and $50 per ounce by the end of 2026 from its earlier forecasts of $41 per ounce and $43 per ounce, respectively.

 

Thu Lan Nguyen, head of foreign exchange and commodity research at Commerzbank, said the recent strength in gold is primarily driven on political and fiscal uncertainty and not just rate-cut expectations or the shutdown of the US government. "While the shutdown may dampen the economic outlook for the US in the short term, it is unlikely to be the decisive reason for gold's continued strength," Nguyen said in a report. "US interest rate cut expectations have shown little movement in recent days after all."

 

The resignations of the prime ministers in both France and Japan have caused risk premiums on the respective goverment bonds to rise, fuelling doubts about any significant fiscal consolidation in either case. Fiscal risks are also being observed for the US and the UK, Nguyen said. "The strong demand for gold could, therefore, be explained, at least in part, by a lack of alternatives, as 'typical' safe havens, such as government bonds from major industrialised nations, have recently become less attractive," Nguyen added. 

 

Silver prices have also continued to rise, tracking the rise of gold. Nguyen said the "little brother" is likely to remain influenced by gold for now. The German bank has also raised its price forecast for platinum to $1,700 per ounce for the end of 2026 from its previous forecast of $1,500 per ounce. At 1642 IST, the most-active December contract of gold on COMEX was 0.2% higher at $3,983.9 per ounce. The same-month silver contract on COMEX was at $48.35 per ounce, down 0.2%.  End

 

US$1 = INR 88.77

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Rajeev Pai

 

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