Against drastic shifts in the global macroeconomic landscape, international financial markets are undergoing a major repricing cycle. Gold, the top reserve asset held by global central banks, is facing severe headwinds after its strong rally earlier this year. Meanwhile, crude oil, hailed as the "king of commodities", has entered an unprecedented difficult period. Hit by a cocktail of bearish factors, major international institutions have collectively slashed price outlooks for these two core assets.

 

 

A string of global financial institutions has recently downgraded gold price forecasts, reflecting mounting pessimism over precious metal performance. Ewa Manthey, Commodities Analyst at ING, noted that the market’s pricing logic has shifted from safe-haven demand to high interest rates and tightening monetary liquidity — the core driver behind the precious metal selloff. Markets are fully pricing in the Federal Reserve’s latest policy signals, with widespread bets on two interest rate hikes in September and December. Tightening monetary expectations have fueled a sharp rally in the U.S. Dollar Index, and the strong dollar alongside elevated yields continues to cap gold prices.

 

Against this backdrop, ING drastically cut its gold price projections for the second half of the year. Its average gold price forecasts for Q3 and Q4 2026 were lowered from $4,850/oz and $5,000/oz to $4,300/oz and $4,600/oz respectively. Deutsche Bank stated in a report that the gold market is trapped in a scenario where hawkish monetary sentiment drives out bullish investors, cutting its Q3 gold target to $4,300 assuming the Fed holds rates steady. If three to four rate hikes materialize, gold could tumble to $3,800 per ounce.

 

Reuters cited Ricardo Evangelista, Analyst at ActivTrades, who argued that monetary policy will dominate gold price trends over the medium to long term, with the Federal Reserve and U.S. dollar movements serving as critical variables. The Fed’s hawkish tilt has bolstered dollar strength, creating persistent headwinds for bullion. Michael Widmer, Commodity Strategist at Bank of America, also admitted that the previous target of $6,000 per ounce is now highly unlikely to be achieved.

 

 

Alongside gold, ING revised down its silver price forecasts for the second half of the year, cutting Q3 and Q4 outlooks from $79/oz and $84/oz to $68/oz and $74/oz. While the silver market remains in supply deficit, key bullish catalysts have weakened noticeably. Widespread adoption of silver-saving and silver-substitution technologies in the photovoltaic sector has slowed growth in solar silver consumption, limiting upside for silver prices.

 

Nevertheless, the institution stressed that the long-term fundamental support for gold and silver remains intact. Sustained central bank gold purchases, foreign exchange reserve diversification and lingering elevated geopolitical risks continue to underpin gold valuations. However, the bearish impact of high interest rates has exceeded expectations, slowing gold’s upward momentum and amplifying volatility. The bank still holds a positive long-term view on silver, forecasting that its supply-demand shortfall paired with global electrification trends will allow silver to modestly outperform gold over time.

 

International spot gold hit an all-time high of $5,596.33 per ounce in late January this year. Yet as Fed policy expectations reversed, the U.S. dollar strengthened and safe-haven demand faded, gold prices have retreated steadily. Based on current levels, bullion has shed more than $1,500 from its record peak, representing a near 30% decline.

 

 

In the crude oil market, tangible progress in U.S.-Iran negotiations has prompted major global financial institutions to slash oil price outlooks, as expectations of unimpeded shipping through the Strait of Hormuz reshape global energy pricing dynamics.

 

Morgan Stanley lowered its average Brent crude forecast for Q3 2026 from $100 per barrel to $90, leaving its Q4 projection unchanged at $80. The bank’s commodities team noted that numerous unresolved details remain between the U.S. and Iran, meaning geopolitical risks have not been fully eliminated. Still, the current diplomatic progress marks a pivotal turning point toward de-escalation and restored oil exports via the strait.

 

Goldman Sachs cut its Q4 Brent forecast from $90/bbl to $80/bbl and its 2027 average price outlook from $80/bbl to $75/bbl. The bank predicts tanker traffic through the Strait of Hormuz will fully return to normal by late July, with additional supply easing widespread market fears of supply disruptions.

 

Citigroup holds an even more bearish outlook, slashing its Q3 Brent forecast to $75 per barrel, with a further drop to $70 in Q4 and an average of $65 for 2027. Market participants view the wave of downward oil price revisions as a consensus repricing of supply-demand fundamentals now that the Middle East geopolitical risk premium has faded.

 

 

Overall, gold and crude oil face multiple headwinds including monetary tightening, a stronger U.S. dollar and evaporating geopolitical risk premiums. While long-term fundamental supports remain in place, the market broadly agrees that heightened price volatility and muted upside momentum will prevail in the short run. Investors should exercise caution amid the current environment, closely track Federal Reserve policy shifts and developments in the Middle East, and prudently adjust asset allocation strategies.