While gold and silver prices are currently experiencing significant volatility after rallying to record highs, AuAg Funds, a Swedish portfolio manager, has predicted that gold is set to reach $6,000 while silver will rise to $133 per ounce in the course of this year.
This bold prediction was contained in the portfolio fund’s outlook for 2026 published last week. Their forecast indicates that the ratio of gold to silver will again climb to 45, which is a multi-year low that was reached last month when gold reached its highest ever price when it briefly climbed to almost $5,600 before retreating by nearly 20% the next day.
The investment firm sounded a warning that investors should expect prices of precious metals, particularly gold and silver, to experience major swings in the region of 30% during this ongoing bull market.
They explained that such major pullbacks are often orchestrated when the market is frothy and major players enter outsized short positions in order to force prices down in a bid to compel speculators to panic and start selling. As weak players sell in a hurry, the parties that started the correction reenter the market at attractive prices and position themselves to benefit from the subsequent up-leg of the resumed rally.
The analysts at the firm say that the ongoing volatility doesn’t take away from the fact that there are major fundamental factors supporting their price predictions for this year and the coming years. They point out that global debt is spiraling out of control and is now close to $150 trillion.
This huge amount of debt is bound to be monetized sooner or later as central banks, especially the Fed, attempt to put a lid on long-term yields by instituting quantitative easing measures while at the same time slashing interest rates. They say interest in gold is rising rapidly as global confidence in the USD declines and the debasement of currencies happens around the globe.
AuAg Funds emphasizes that under these circumstances, the upside potential of silver remains higher than that for gold, given the fact that silver has experienced a sustained structural deficit on the supply side and yet its demand remains inelastic due to the limited options that industrial users of the metal have in finding alternatives that can match the attributes of silver.
Additionally, industrial components that contain silver will continue being made at an increasing rate despite the rising price of silver. This is because the precious metal only accounts for a small fraction of the cost of these finished products, so skyrocketing silver prices are unlikely to depress industrial demand.
The analysts point out that gold and silver mining stocks remain undervalued even as the prices of the commodities rally. This creates massive opportunities for investors to get in and position themselves to benefit as market valuations start rising as the current high prices of silver and gold begin getting priced into company shares. Entities like New Pacific Metals Corp. (NYSE American: NEWP) (TSX: NUAG) could be well positioned to leverage the bull market of silver and effortlessly attract new investment.
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