Investing.com -- Strategists at RBC Global Mining Equities updated their gold price forecasts, expecting a rise in the price of the yellow metal in the coming years.
The team now projects gold to reach $2,844 per ounce in 2025, which is a slight increase from the previous estimate of $2,823 per ounce.
For 2026, the forecast is more significantly raised to $3,111 per ounce, marking an 8% increase from the earlier prediction of $2,878 per ounce.
The revised projections are informed by RBC’s machine learning (ML) insights. The updated figures include additional year-to-date (ytd) model training data and minor revisions to their model factors.
These factors are based on conservative assumptions, including a reasonably firm monetary policy and the absence of a recession. If realized, these drivers could yield upside to RBC’s year-end forecast to more than $3,100 per ounce.
The firm’s long-term gold price forecast of $2,200 per ounce remains unchanged. However, the medium-term price outlook for gold over the 2027-2029 period has been adjusted upwards by an average of 9%.
“This is influenced by rising mining costs of production as well as our positively-biased RBC Elements gold price model,” RBC noted.
While tariff-related risks appear to be already factored into current prices, there is still potential for a positive price skew, the investment bank said.
RBC’s 2025 gold outlook suggests that current prices, at approximately $2,900 per ounce, are neutral compared to their forecast for that year. However, potential growth risks and a significant reduction in interest rates in 2025 have not been included in these estimates.
Scenario analysis by RBC outlines a possible price increase to $3,300 per ounce by year-end 2025 if a recession occurs and monetary policy shifts more dramatically. Conversely, the downside risk is estimated at $2,700 per ounce.
Both scenarios represent a $200 increase from previous estimates provided in the December Q1 price outlook.
Despite the positive performance of gold equities, which have seen a 23% increase year-to-date compared to gold’s 11% rise, investor sentiment remains mixed, with gold equity ETFs recording a record pace of outflows.
“Anecdotally, interest in gold equities is out of sync with current record high gold prices, reinforced by the record pace of outflows from gold equity ETF products ytd,” RBC said. “Even after ytd positive performance, gold equity valuations appear attractive.”
The firm suggests that sustained high gold prices, combined with the sector’s commitment to capital returns, could drive equity performance, where return initiatives have been gradual.
While financial results are often affected by seasonally weaker operations in the first half of the year, they expect upcoming reports to highlight solid free cash flow generation.