When uncertainty rises, gold rallies

This blog post is part of a special series based on the October 2025 Commodity Markets Outlook, a flagship report published by the World Bank. This series features concise summaries of commodity-specific sections extracted from the report. Explore the full report here.

Precious metal prices are projected to reach new all-time highs in 2026, following an estimated 41 percent increase this year. Gold briefly exceeded $4,300 per ounce and silver touched $54 per ounce in October before easing back, while platinum has also posted solid gains this year. Gold is on track to record fresh highs next year, supported by safe-haven demand, including continued central bank buying. Silver prices are expected to rise further, driven by growing industrial demand from renewable energy technologies alongside safe-haven interest, while tight supply conditions are likely to continue supporting platinum prices. However, uncertainty around the price outlook remains significant. A renewed escalation in geopolitical tensions or heightened policy uncertainty could push gold prices above current projections, while weaker industrial activity could place downward pressure on silver and platinum, pulling their prices below baseline forecasts.    

Gold prices climbed to record highs in early October before easing in recent weeks. The surge was fueled by strong safe-haven demand amid heightened geopolitical tensions and broader economic concerns, helped by a weaker U.S. dollar and U.S. monetary easing. Gold demand rose 10 percent in the first three quarters of 2025 (y/y), led by strong investment inflows, including from gold-backed ETFs and continued (though moderating) central bank purchases. Prices are set to rise by around 42 percent in 2025, marking the strongest annual gain since the late 1970s.  Both the 1979-80 surge and the current rally have occurred alongside heightened geopolitical tensions and a weakening U.S. dollar. The current rally is distinguished by record central bank buying, with purchases since 2022 more than twice their 2015–19 average. Central banks’ share of total demand rose to nearly 25 percent in 2024, compared with 12 percent in 2015-19. Price gains are expected to continue into 2026, albeit at a slower pace, as official sector demand and investor interest gradually moderate.

Silver prices surged to record highs of around $54 per ounce in mid-October, supported by safe-haven demand amid heightened geopolitical uncertainty and firm industrial demand. Prices have since pulled back somewhat, reflecting a broader market correction and easing concerns about supply constraints. Looking ahead, demand is expected to continue rising, driven both by safe-haven buying and growing use in renewable energy technologies and semiconductor production, as industrial uses account for more than half of total demand. Supply, however, is expected to expand only gradually over the forecast horizon, with modest increases in mining output and recycling. On balance, demand is expected to outpace supply, pushing prices up by roughly 34 percent in 2025 and an additional 8 percent in 2026.

Platinum prices have surged this year as production has dropped to multi-year lows. Demand is expected to increase gradually, although growth in automotive use—mainly for catalytic converters, which account for about 40 percent of total demand—is likely to remain subdued as EV adoption advances. Industrial and jewelry demand is also projected to post only modest gains. Supply is projected to recover modestly from recent lows, with increases in mining output in South Africa—the world’s largest producer—and recycling output from the auto and jewelry sectors. Even so, supply is still expected to fall short of demand, keeping market conditions tight. After rising by an expected 29 percent in 2025 (y/y), platinum prices are projected to increase by around 4 percent in 2026.

Risks to the precious metals outlook are tilted to the upside. Renewed geopolitical tensions, trade frictions, or financial market volatility could prompt additional safe-haven demand, pushing gold and silver prices above current projections. On the downside, a more hawkish U.S. monetary stance or a sustained easing in geopolitical tensions could curb investment demand, while softer industrial activity—particularly in renewable energy and electronics—could weigh on silver and platinum.