CIBC lowers gold price forecasts, holds $5,500 for 2028

Investors betting on gold are being reminded that geopolitical upheaval does not automatically lift the metal. In some cases, the inflation and rates fallout outweighs any refuge buying, and at other times reserves built up in advance are meant to be drawn on when a crisis such as a war erupts.

That tension runs through CIBC's newest precious metals report. The bank has cut its projections sharply, pointing to higher energy costs, a firmer dollar and a more hawkish Fed as complicating factors. It still anticipates a meaningful recovery in the next two years.

CIBC's October report lowers the average gold price it expects for 2027 to US$5,200 per ounce, down from $6,500. The 2028 projection is trimmed to $5,500 from $6,000, and its fourth-quarter 2026 estimate is cut to $4,500 from $6,500.

The adjustments are large, yet they keep CIBC well ahead of the consensus figures shown in the same report: $4,620 for 2027 and $4,451 for 2028.

"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," CIBC writes.

Gold is changing hands at $4147, more than 25% below the early-year high of roughly $5,600. Viewed against that benchmark, the 2028 average forecast suggests a gain of around 29%. Reaching it is the hard part.

According to the report, the US-Iran conflict has fueled demand for hedging even as it drives up oil prices and inflation expectations. In turn, the dollar has gained and the Fed has moved toward tighter policy, hurting a metal that offers no yield.

That leaves traders with an uncomfortable mix. Heightened geopolitical risk may support gold, but another jump in energy costs could strengthen the same rate expectations that weigh on it. CIBC points to a possible escape:

"In our view, gold could benefit if economic growth weakens or inflation moderates sufficiently to allow the Fed to pivot toward a more accommodative policy path than is currently reflected in market expectations or the FOMC’s projections."

That throws the spotlight onto inflation and growth numbers. A lasting rebound would come more readily if real yields and the dollar eased.

The optimistic outlook also rests on a big assumption about investment demand. CIBC projects gold ETF demand of 1,000 tonnes a year in both 2027 and 2028, versus only 35 tonnes in 2026. Central-bank buying, it projects, will hit 1,000 tonnes annually in each of those years.

Silver faces a steeper near-term cut. CIBC trims its 2027 call to $85 an ounce from $120, still far above the $66 consensus in the report.

Copper moves in the opposite direction: CIBC lifts its projection to $6.50 per pound for the fourth quarter as well as for 2027 and 2028.

"Demand growth is increasingly driven by grid modernization, electrification, renewable energy and digital infrastructure while new supply remains constrained by long development timelines, capital inflation and operating disruptions."

That contrast matters. Copper's improved forecast is built on physical demand and tight supply, while gold's rebound relies more heavily on investment flows and on how the monetary-policy backdrop evolves.