Strategists at CIBC (Canadian Imperial Bank of Commerce) now say there’s really no reason to question gold’s continued viability as long as dollar weakness remains in the cards.
In fact, say the analysts, the impact of that predicted, ongoing weakness is likely to be so profound that they see the price of gold continuing to venture much further into record territory over the next two years, at least.
In a recently published update to earlier price forecasts, the commodities team at CIBC said they now see the price of gold averaging $6,000 per ounce in 2026, a marked increase from their projection of $4,500 per ounce made in October.
CIBC Strategists: Relentless Pressure on the Dollar Should Usher in $6,500 Gold Next Year
What’s more, they believe the price of gold will keep rising into 2027, rising to $6,500 per ounce that year. That would be a 30% increase from present levels.
Explaining why they believe that dollar distress will play such a prominent role in supporting gold prices through the foreseeable future, the analysts said:
“Dollar debasement is likely to persist as the central banks and investors react to heightened uncertainty by quietly allocating away from U.S. Treasuries. We believe further pressure on the dollar will come from rate cuts and continued tension between the Fed and the White House, and we believe Kevin Warsh will look to tighten the Fed balance sheet in order to lower interest rates for Main Street.”
Indeed, while Fed chair nominee Warsh historically has been a fan of tighter monetary policy and a critic of quantitative easing, he has, more recently, seemed to take a decidedly dovish tilt, as the strategists at CIBC noted.
“He has argued for tighter Fed balance sheets, which he asserts would tamp inflation and allow for lower rates for Main Street,” they said. “More recently, he has indicated support for Trump’s government efficiency drive, noting it could temper inflation and allow for lowering of rates.”
That said, CIBC analysts ultimately believe that the matter of gold-favorable currency debasement has become a structural feature of the global economy and something that transcends monetary policy in the U.S.
“With the decades-long de facto safe-haven asset, U.S. Treasuries, no longer considered ‘risk-free,’ investors and central banks are looking for alternatives,” the analysts noted. “The pickings are slim. Most Western economies are facing near-record debt-to-GDP ratios, and most are looking to inflate rather than constrain their way out of the dilemma. Investor confidence in fiat currencies has eroded, and gold has seen much of this flight to safety.”
This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.
The Gold Strategist 