ING Economics has revised its gold price projections downward, acknowledging that a sharp correction in the precious metal has reshaped its trajectory for the remainder of 2026. The bank now expects gold to average $4,300 per ounce in the third quarter and $4,600 in the fourth quarter, down from previous estimates of $4,850 and $5,000, respectively.
The downgrade comes as gold's rally from early 2026 has reversed, leaving prices in negative territory for the year. Commodities strategist Ewa Manthey noted that the correction has become increasingly difficult to ignore, driven by a repricing of interest rate expectations following recent Federal Reserve communications. Investors have pushed back expectations for monetary easing, lifting Treasury yields and bolstering the US dollar.
“This has created a less favourable backdrop for gold, which typically struggles when real yields rise, and the dollar strengthens,” Manthey said in a research note. The combination of higher yields and a stronger greenback has eroded the bullish momentum that carried gold earlier this year.
Investor Demand Weakens
ETF investors, who were instrumental in gold's rally at the start of the year, have retreated. Holdings are now about 1.5% below where they began 2026, with profit-taking particularly evident among North American investors. Manthey said ETF demand is likely to remain less supportive than it was in 2025, even as recent inflows suggest selling pressure may be easing.
The retreat of speculative investors has left gold more reliant on official sector demand, which has remained robust. Central banks added around 244 tonnes of gold in the first quarter, with Poland among the largest buyers and China extending its buying streak to 19 consecutive months. According to the World Gold Council, 84% of central banks expect gold to account for a larger share of reserves over the next five years.
“This appetite reflects ongoing diversification efforts and should help stabilize prices despite weaker investor flows,” Manthey said. However, she cautioned that the path higher is likely to be slower and more volatile than previously expected.
Silver Also Downgraded
ING also cut its silver forecasts, reflecting slower growth in solar demand and substitution trends in photovoltaic manufacturing. The bank now expects silver to average $68 per ounce in Q3 and $74 in Q4, down from $79 and $84. Manthey said that while silver remains supported by electrification and structural deficits, the pace of gains will be more modest than previously anticipated.
The downgrade underscores how quickly sentiment has shifted in precious metals. Rising yields and a stronger dollar have eroded investor enthusiasm, while geopolitical tensions have failed to generate the safe-haven inflows seen in past crises. For gold, the correction has forced ING to temper expectations, even as long-term fundamentals remain supportive.
Investors should note that the broader market environment remains challenging for gold. For context, similar headwinds have been observed in other asset classes, as highlighted in our coverage of BTIG's warning on the SOX index and the slashing of Brent forecasts by Wall Street banks amid a looming supply glut.
This article is for informational purposes only and does not constitute financial advice.
