The World Bank, in its April Commodity Markets Outlook report, provided an assessment on the future trajectory of precious metals. Against a backdrop of persistent geopolitical conflicts unsettling markets, the prices of gold and silver, despite experiencing significant volatility, are approaching a cyclical peak overall, with limited upside potential expected by 2026.

The report reviewed market performance since the start of the year. Compared to the fourth quarter of last year, gold closed the first quarter of this year up 17%. Silver saw more substantial gains, surging 55% in the first three months of this year relative to the fourth quarter of 2025. Calculated by the overall index, the precious metals price index has accumulated an 84% increase compared to the first quarter of last year.

World Bank commodity analysts noted that the recent pullback in gold and silver prices is partly due to a cooling off of the speculative demand that swept through markets in previous months.

Amid ongoing tensions in the Middle East, rising energy prices have heightened inflation expectations and reinforced market expectations for interest rate hikes. These factors collectively are curbing the momentum for further gains in precious metals. Nevertheless, the report still expects prices to maintain some resilience in the near term and potentially sustain growth for another year. Specific forecasts include:

The World Bank projects gold's average price this year to be around $4,700 per ounce, a 37% increase from last year. However, by 2027, the gold price is expected to decline by approximately 7%.

The outlook for silver is similar: the average price this year is forecast near $70 per ounce, a 76% year-on-year increase, with a potential 7% decline likely in the following year.

Analysts emphasized that precious metal prices are highly sensitive to changes in global risk appetite, the macroeconomic environment, and speculative capital flows, meaning significant uncertainty remains regarding their future path. Under a baseline scenario, risks are skewed to the upside—if global trade tensions escalate or financial market volatility intensifies, safe-haven demand could once again push gold and silver prices higher, exceeding the current forecast range.

However, downside factors should not be overlooked. The World Bank pointed out that inflationary pressures stemming from rapid increases in energy and other commodity prices raise the opportunity cost of holding non-yielding assets like gold and silver. If geopolitical tensions ease, inflows of safe-haven capital could also diminish. Furthermore, if central banks slow their pace of gold purchases after years of substantial accumulation, an important source of demand support would weaken.

For silver, the risks are more structural. Analysts believe that if economic uncertainty worsens and drags on growth, weaker industrial demand would have a more direct negative impact on silver prices.

The report also cautioned that price declines could occur abruptly. The speculative demand that built up rapidly since the start of 2025, if reversed concentratedly due to profit-taking or asset allocation adjustments, could significantly amplify the magnitude of any price retreat.

Beyond precious metals, the World Bank also revised its outlook for the broader commodity market. Influenced by the war involving Iran, market dynamics have shifted markedly: the commodity price index, previously forecast in an October report to fall by 7% for the year, is now projected to see an average annual increase of 16%. This would be the first annual rise since 2022.

Energy remains the dominant factor. Analysts expect prices for oil and natural gas to rise significantly due to supply shortages, driving an average 24% increase in energy prices for 2026. Simultaneously, supply shocks triggered by the war have spread to multiple sectors—export disruptions and rising production costs have pushed fertilizer prices higher, transmitting through input cost channels to food and metal markets.

In this highly volatile environment, the report expects average base metal prices to reach record highs, with precious metals also trading at similarly elevated levels.

The World Bank concluded with a warning that the broad upward trend in commodities could push global inflationary pressures to their highest point in the past four years.