ING cuts gold forecast to $4,300 as dollar, yields pressure metals

Gold's correction from January's record highs has deepened as a resurgent dollar and elevated bond yields force a reset in near-term price expectations.

Gold fell below $4,000 an ounce this week for the first time since March, extending its decline from a January record of $5,477.79 as the dollar surged and rate-hike bets intensified. Spot gold traded at $4,037.38 an ounce on June 25, down 1.73 percent on the session and 26.30 percent below its 52-week high, according to market data.

"Elevated yields and a strong dollar are likely to remain near-term headwinds for gold," Ewa Manthey, commodity analyst at ING, said in a report published this week. "Geopolitical tensions have failed to generate the type of safe-haven inflows seen during previous periods of uncertainty."

ING cut its third-quarter gold forecast to $4,300 an ounce from $4,850, and its fourth-quarter estimate to $4,600 from $5,000. The bank lowered its silver outlook to $68 an ounce for Q3 and $74 for Q4, down from $79 and $84, respectively. Silver traded below $60 an ounce during the selloff, though it edged higher on June 26 as Treasury yields eased following softer US inflation data.

The downgrades reflect a market recalibrating to a higher-for-longer rate environment. The Dollar Index climbed to 101.69, its highest since May 2025, while markets price a rate hike as early as September — a scenario that strips gold of its two primary supports: a weak dollar and low yields. The Federal Reserve held its benchmark rate at 3.50 percent to 3.75 percent at its June meeting, though Chair Kevin Warsh signaled support for a hike this year.

Central bank demand remains intact

Despite the near-term headwinds, ING said the structural case for gold has not broken. Central bank purchases continue at a robust pace, reserve diversification remains a priority across emerging-market central banks, and geopolitical risks show no sign of abating. Manthey described the correction as a "reset in our forecasts, but not in our broader view of the market."

The bank continues to expect silver to modestly outperform gold over the medium term, supported by ongoing market deficits and broader electrification trends. However, Manthey noted that some of silver's strongest demand drivers are becoming less supportive, with growth in solar demand slowing and continued thrifting in photovoltaic manufacturing reducing silver intensity per panel.

Gold at a crossroads

Gold's 21.36 percent gain over the past 12 months still leaves it well above its 52-week low of $3,267.56, but the speed of the correction — more than $1,400 from the January peak — has surprised many traders. The path higher is likely to be slower and more volatile than previously expected, ING said, with the next major catalyst being the Fed's September meeting and any shift in the dot plot.

This article is for informational purposes only and does not constitute investment advice.