David Wilson, head of commodities strategy at BNP Paribas, recently stated that new geopolitical uncertainties are accelerating the rise in gold prices, pushing them closer to $5,000 per ounce at a faster-than-expected pace. This trend may prompt the bank to revise its previous forecasts upward. Meanwhile, as tensions in the physical silver market ease, the commodity may see a pullback after reaching $100 per ounce.



As a core driver of the precious metals sector, uncertainty continues to support gold prices. Wilson points out that gold prices continued to hit new highs throughout 2024, and two key new uncertainties are further propelling gold prices to new historical highs: the Trump administration's new tariffs on Greenland and market concerns about the Federal Reserve's independence and future interest rate path.

Currently, all factors supporting gold prices are in effect, confirming the bank's previous prediction. BNP Paribas predicted as early as November 2024 that gold prices would eventually reach $5,000 per ounce, a target considered bold at the time. However, gold prices have now climbed to around $4,700, only $320 away from the $5,000 mark, making the target attainable no longer far off.

Regarding whether to raise its 2026 gold price forecast, Wilson stated explicitly that the bank has begun considering this possibility given the current strong gains in gold prices. Amidst continued uncertainty, the probability of gold prices breaking through and holding above $5,000 has significantly increased. If this breakthrough occurs, there is still room for further upward movement; however, the specific revised target price has not yet been determined.

Compared to gold, the silver market, with its thinner market capitalization and lower liquidity, exhibits stronger price volatility. Its parabolic upward trend began in mid-December 2024, driven by multiple catalysts. Among these, India's announcement that it would include silver in its collateral list gradually attracted attention in Western markets from late October to early November of last year. This, coupled with market concerns about China restricting silver exports through new licensing regulations and the US's proposed tariffs on key minerals, with silver prominently listed, led to a large outflow of silver from the European physical market to the US, directly tightening the physical market and becoming the core driver of silver price increases.

Last week, the White House announced a temporary halt to tariffs on key minerals, triggering a 7% pullback in silver prices. However, silver subsequently strengthened again thanks to safe-haven buying of gold. Wilson emphasized, however, that the tightness in the physical silver market has clearly eased, rental rates have fallen sharply, and the various disruptive factors that previously drove prices up are gradually dissipating.

Given the illiquid nature of the silver market, a significant pullback is highly likely once speculative funds begin to take profits. However, Wilson also predicts that silver may still reach the $100/ounce level in the short term, which could become a point where concentrated profit-taking occurs, at which point silver prices may fall back from that level.