- World Bank forecasts 40% rise in precious metals prices in 2026 due to safe-haven demand
- Precious metals prices expected to remain over three times 2015-2019 averages in 2027
- Geopolitical tensions and policy uncertainty continue to drive precious metals price outlook
Gold and silver prices are in focus as geopolitical tensions and policy uncertainty continue to shape the outlook for precious metals. The World Bank expects precious metals prices to rise 40% in 2026, supported by safe-haven demand, according to its Commodity Markets Outlook released on Oct. 28. Prices are expected to moderate somewhat in 2027 but remain well above historical averages.
Geopolitical Tensions, Policy Uncertainty Drive Outlook
The World Bank expects precious metals prices to remain elevated as uncertainty sustains demand for safe-haven assets. Gold is particularly sensitive to changes in geopolitical risks and investor sentiment, as investors often turn to the metal during periods of heightened uncertainty.
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Any escalation in geopolitical tensions or increase in policy uncertainty could provide further support to prices. Conversely, an easing of tensions could reduce safe-haven demand and limit gains.
The World Bank forecasts precious metals prices in 2027 to remain more than three times their average prices between 2015 and 2019, even as the pace of increase moderates. Its 40% projection applies to the precious metals category as a whole, rather than to gold and silver individually.
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Commodity Market Volatility Adds To Price Uncertainty
The report also points to stronger connections between commodity markets during periods of stress. Volatility across commodity groups has become more interconnected, with the influence of oil prices on other commodities increasing since the conflict in the Middle East began.
Industrial metals witness the most amount of volatility to other commodity groups on average, the World Bank said. These cross-market linkages add another layer of uncertainty to the outlook for precious metals.
The broader commodity outlook remains volatile. Overall commodity prices are forecast to rise 23% in 2026 before declining 7% in 2027, while energy prices are expected to soar 32% this year.
On the domestic front, MCX gold futures for Dec. 4 expiry were at Rs 1,43,339 on Oct. 29, while silver futures for the same expiry stood at Rs 1,92,241 at around 1:45 p.m.
For both metals, geopolitical developments, policy uncertainty, and shifts in safe-haven demand remain important factors to watch as markets assess the World Bank's outlook.
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