In its third-quarter commodity report, BMO analysts adjusted their gold projection to an average of $4,625 per ounce for the remainder of the year, a 5% reduction from earlier estimates. Despite this near-term pressure, the firm maintains a bullish long-term thesis, anticipating prices will climb above $5,000 by the first quarter of 2027. Analysts suggest that while current sentiment is tethered to geopolitical tensions and energy-driven inflation, the sector is poised to regain momentum once global conditions stabilize.

Silver faces a similar recalibration, with near-term price targets for the third quarter trimmed to $69 per ounce. BMO expects a modest recovery toward year-end, citing the metal's industrial utility—particularly in power infrastructure and electrification—as a vital floor for valuation. However, the immediate horizon remains dominated by U.S. monetary policy. Following Federal Reserve Chair Kevin Warsh’s recent emphasis on price stability, markets have aggressively priced in potential rate hikes, pushing two-year Treasury yields to their highest levels since April 2025.

Beyond short-term volatility, BMO identifies 'de-dollarization' as a structural pillar for long-term gold demand. This trend encompasses both geopolitical shifts, as nations seek to reduce reliance on the U.S. dollar, and hedging strategies against sovereign debt and monetary debasement. While rate cuts remain a distant prospect, the bank suggests these systemic factors will continue to influence market positioning as the global economic landscape evolves.