Gold and silver could be poised for their next leg of rally, according to wealth management firm Monarch PMS, which laid out three distinct scenarios for where the precious metals could land by the end of 2026 — with probabilities attached to each.

The Base Case: Most Likely Outcome

Monarch's base case, carrying a 55% probability, puts gold at $4,300-$4,700 an ounce and silver at $70-$85 an ounce by year-end. This scenario assumes the US Federal Reserve holds rates through September, energy prices normalize, real yields plateau, and central banks continue buying around 250 tonnes of gold a quarter — broadly a continuation of current conditions rather than a dramatic shift in either direction.

The Bull Case: A Fed Pivot Toward Easing

In its bull case, assigned a 25% probability, Monarch sees gold reaching $5,000-$5,600 an ounce and silver climbing to $95-$120 an ounce. This scenario would require weakness in the labor market to push the Federal Reserve toward monetary easing, triggering a rollover in real yields. Monarch also expects renewed institutional reallocation toward precious metals and a return of physical tightness in silver to amplify the upside in this scenario — implying the most bullish outcomes could push well beyond even the stated bull-case range, particularly for silver.

The Bear Case: A September Hike

The downside scenario hasn't disappeared entirely. Monarch assigned a 20% probability to its bear case, under which gold falls to $3,400-$3,900 an ounce and silver drops to $45-$55 an ounce. This scenario assumes the Fed delivers a rate hike in September, oil prices decline further, and weaker demand turns the current disinflationary trend into a broader economic slowdown.

Why Silver Looks Cheaper Than Gold Right Now

Beyond the year-end price targets, Monarch's report highlights a specific relative-value opportunity: the gold-silver ratio — the number of ounces of silver needed to buy one ounce of gold — currently sits around 69x, sharply higher than the 46x level seen at January's peak, and now close to its 21st-century average. Monarch uses a 60x ratio as its benchmark in valuing the two metals relative to each other, meaning the current elevated ratio suggests silver has underperformed gold after giving back much of its earlier gains — making silver comparatively cheap on the firm's own valuation framework as investors weigh the outlook for the rest of 2026.

Silver's Supply Squeeze

Silver's supply-demand fundamentals remain notably tight. The market is facing its sixth consecutive annual deficit, while 762 million ounces have been withdrawn from above-ground stocks since 2021. Mine supply, meanwhile, has remained broadly flat for roughly a decade — a structural supply constraint that Monarch cites as a key factor that could amplify any renewed rally in silver prices, particularly under the bull-case scenario where physical tightness intensifies further.

Where Prices Stand Today

Both precious metals ended Friday's trading session higher, with MCX silver rebounding sharply from the day's low and gold also gaining, supported by a weaker US dollar, easing inflation concerns, and renewed buying interest. MCX silver rose ₹2,699, or 1.12%, to ₹2,43,350 per kg on Friday, touching an intraday high of ₹2,44,950. Internationally, gold had fallen toward $4,560 an ounce Friday, reflecting the metal's ongoing volatility even as the broader medium-term outlook remains constructive across all three of Monarch's scenarios.

Context: A Strong Year for Bullion Regardless of Scenario

Even Monarch's bear case would still leave gold well above where it started the year, underscoring just how strong 2026 has already been for precious metals broadly. Gold has repeatedly hit fresh record highs throughout the year, driven by a combination of central-bank buying, safe-haven demand tied to the ongoing US-Iran conflict, and shifting expectations around the Fed's rate path — a backdrop that continues to inform how seriously markets are treating even Monarch's most bullish $5,600 target.

What's Next

With the Fed's September 15-16 meeting now looking like the single biggest swing factor determining which of Monarch's three scenarios plays out, gold and silver traders are likely to remain highly sensitive to incoming labor market and inflation data in the weeks ahead. For continuing precious metals coverage, see the full Business Standard report.

This article discusses market forecasts, which are inherently uncertain. Nothing here constitutes financial advice — always do your own research before making investment decisions.