Morningstar has lifted its near-term gold price assumptions and now forecasts average prices of US$4,700 per ounce from 2026 to 2028, up from US$4,000, helped by ETF and central bank purchases.
The investment research firm has also rolled forward its assumed midcycle price to 2030 from 2029, at around US$2,050, based on estimates of the long-run marginal cost of production.
Equity analyst Jon Mills said that after a brief pullback in October, the gold price has resumed its relentless rise, now trading at another historic high of around US$4,600 per ounce.
“Concerns over the Fed’s independence add to strong ETF and central bank purchases and ongoing US fiscal deficits as major tailwinds.”
Higher assumed near-term gold prices have pushed fair value estimates for Morningstar’s gold coverage up by between 9 per cent and 14 per cent.
“But the higher gold price is more than reflected in the shares, and our coverage is materially overvalued by between 60 per cent and 265 per cent,” Mills said.
“Even with unit cash costs increasing across the industry in recent years due to inflation, the historically high gold price means we forecast higher near-term margins across our coverage compared to their historical averages.”
However, Morningstar expects margins to revert to around their historical averages at midcycle, albeit adjusted where applicable for forecast changes in production volumes at existing mines and across company mine portfolios.
“Along with our assumption that the gold price returns to being driven by fundamentals based on supply and demand rather than by price-insensitive central bank purchases and pro-cyclical ETF flows, this accounts for the material overvaluation of our gold coverage.”
ANZ senior commodity strategist Daniel Hynes said rising geopolitical tensions are continuing to push precious metals higher, with gold and silver extending their record-breaking rallies on 15 January to hit US$4,639 and US$93 respectively.
“Gold and silver hit record highs as investor demand surges. The prospects for gold and silver remain positive in 2026,” Hynes said. “We see a multitude of supportive factors that will likely continue or even intensify as the year unfolds.”
Silver has also climbed amid traders’ concerns over a potential supply squeeze.
Hynes said the market has been fretting that the administration will impose tariffs on the metal, prompting silver to flood into US vaults and creating a shortage in the London trading hub.
Easing monetary policy and a weaker US dollar contributed to last year’s rise in gold prices; however, Hynes said these factors alone cannot explain the sharp recent rally in the precious metal.
“Instead, heightened trade tensions, persistent geopolitical risks and deepening economic and political uncertainties have become the primary drivers. Our analysis shows that volatility and uncertainty outweigh traditional influences such as the USD and yields. The inverse relationship between gold, real yields and the USD has also weakened, as is evident in gold’s strong performance during Q42025 even as real yields were rising.”
Meanwhile, Citi is now forecasting gold will reach US$5,000 and silver US$100 within the next three months.
