CIBC lowers gold price forecasts, holds $5,500 for 2028
CIBC cut its gold forecasts in an October report, trimming the 2027 average to $5,200 and 2028 to $5,500. Silver was downgraded, while copper was raised.
Oil prices rose after Houthis hit Saudi Aramco and Iran unveiled new shipping tactics; Brent near $106, WTI near $95.
The moves on Wednesday indicated that the risk premium is being influenced more by threats to infrastructure and shipping rather than actual supply shortfalls. Despite Gulf export volumes recovering, prices still advanced. WTI's outperformance relative to Brent narrowed the spread, suggesting US crude is seeing bids as an alternative source. If Brent stays above $100, inflation pressure on central banks remains high, reducing the scope for rate cuts and putting pressure on fuel-importing currencies. In the short term, the main factors that could counteract further Gulf tensions are US inventory data and confirmation of Russian diesel flows.
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Even though more Gulf crude is arriving on the market, the fear premium is held in place by missiles, mines and Iran's updated playbook.
Highlights:
On Wednesday, oil prices increased following the Houthi attack on the city housing Saudi Aramco's headquarters and Iran's announcement of new shipping targeting tactics aimed at keeping prices elevated. Brent crude futures closed up about 0.4% at roughly $106 a barrel, while US WTI rose around 1% to about $95, reaching a three-week peak.
Analysts ascribed the price rises to strikes on vessels passing through the Strait of Hormuz and the growing conflict between Saudi Arabia and the Iran-backed Houthis, calling the session largely fear-driven. Iranian officials refused to specify the new approach against ships, but one disclosed that Iran had begun implementing different offensive tactics around ten days ago.
Saudi Arabia's energy ministry reported that the Houthis attacked an Aramco administrative building in Dhahran, resulting in a minor fire. Over the last week, the group has launched ballistic missiles and drones at the kingdom, claiming it is retaliation for Riyadh's backing of Yemen's government forces. The international airport in Riyadh has been struck four times, and a Saturday attack killed 13 individuals. A Yemeni military spokesperson stated that operations against Saudi airports and oil facilities would continue in the days ahead, and warned shipping companies, civilians, and workers to evacuate those areas.
At sea, Iran's Revolutionary Guards Navy said a container vessel carrying 2,500 containers sank south of the Strait of Hormuz after striking a naval mine and catching fire. A day earlier, the UK Maritime Trade Operations agency reported that a container ship and a tanker were hit by unknown projectiles inside the strait. US President Donald Trump reiterated his opinion that more oil is currently leaving the strait than before the war, and that the conflict with Iran would conclude shortly.
Supply figures provided some offset. The IEA's October Oil Market Report noted that crude exports from Middle East Gulf producers increased by roughly 4.4 million bpd in September, reaching about 75% of pre-war levels. Independent tracking data indicated that Gulf flows excluding Iran rebounded to above 81% of pre-war levels, driven by Saudi Arabia, while Iranian exports dropped to zero due to a US blockade. Analysts warned that additional crude flowing to global markets does not necessarily indicate higher production, as part of the recovery comes from barrels diverted from regional refineries.
The IEA now projects world oil demand to decline by about 2.6 million bpd in 2026, a bit deeper than its earlier estimate of a 2.5 million bpd fall, as conflict and high prices dampen consumption. It forecasts global supply averaging roughly 101 million bpd this year, a year-on-year decline of nearly 6 million bpd. Russian crude production ticked up by about 65,000 bpd in September to approximately 8.4 million bpd, still close to 900,000 bpd below the same month last year.
Russian diesel could also limit price volatility. Last Friday, Trump announced that Russia had consented to supply diesel to global markets, and his administration temporarily suspended US sanctions on Russian diesel. Analysts said the anticipation of higher Russian diesel exports is likely to curb sharp movements in either direction.
Attention now shifts to US inventory numbers. The American Petroleum Institute's industry data (now available, link above) and the official Energy Information Administration data on Thursday are both due a day later than usual due to Monday's federal holiday.
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CIBC cut its gold forecasts in an October report, trimming the 2027 average to $5,200 and 2028 to $5,500. Silver was downgraded, while copper was raised.
Oil prices turned higher after US strikes on an Iranian base and Houthi attacks on Saudi oil facilities, with WTI at $103.13.
Al-Arabiya reports a US-Iran breakthrough could be announced this week, but the two sides remain divided over the order of concessions.
Crude oil fell after Trump waived some Russian sanctions, but geopolitical tensions from Ukraine and the Middle East continue to support prices.