Gold SWOT: CLSA Sees Gold Regaining $5,500 per Ounce in the Medium Term

Strengths

• The best performing precious metal for the past week was silver, up 6.20%. According to Canaccord, K92 Gold production beat estimates at 46,700 ounces versus 42,800 ounces, marking a strong start to 2026 as the company progresses toward full-year guidance of 190,000–225,000 ounces.

• Union Bancaire Privée is buying gold again after cutting a significant position in response to an Iran war-induced slump, saying the long-term outlook remains intact. The Swiss private bank is gradually adding bullion back to discretionary client portfolios after reducing exposure to 3% from around 10%, according to Bloomberg.
• Orla’s quarter first quarter of 81,206 ounces of gold exceeded BMO’s expectations of 76,000 ounces due to stronger output at Musselwhite. The company remains on track to meet annual guidance of 340,000–360,000 ounces and continues to show consistent performance with higher grades expected in the second half.

Weaknesses

• The worst performing precious metal for the past week was gold, still up 1.69%. Gold’s 2% move following the reopening of the Strait of Hormuz masks a more complex picture, as the metal has shed nearly 8% since the Iran war began and remains sensitive to shifts in rates and the U.S. dollar.
• According to the latest Indian trade data, rough diamond import volumes decreased 31% year-over-year (YoY) and 1% month over month, while values fell 45% YoY and 10% month over month. Polished diamond export volumes fell 26% YoY and 20% month over month, while export values declined 27% YoY and 38% month over month, pointing to ongoing destocking pressures, according to Morgan Stanley.
• The ceasefire and reopening of the Strait of Hormuz have eased Europe’s inflation concerns, with energy prices falling and rate hike expectations unwinding. German yields and inflation swaps are cooling, giving the ECB and BOE more flexibility to remain measured.

Opportunities

• ASX gold sector forward PE has contracted to 10x as consensus earnings estimates have risen on higher gold prices. In prior gold bull markets, sector PE contracted to around 15x as markets priced in peak earnings. Gold equities are now trading at 0.6x the ASX200 on a relative PE basis, the lowest since prior cycles, compared with 1.9x at the 2011 peak, according to Bank of America.
• CLSA sees gold regaining $5,500/ounce in the medium term and upgraded its 2026, 2027, and 2028 price forecasts to $4,840, $5,130, and $5,500/ounce, respectively. It also raised its long-term assumption to $3,500/ounce, citing gold sector cost inflation and continued growth in U.S. money supply.
• OR Royalties announced it has entered into a binding agreement with Canadian Copper for a $28 million precious metals stream on the company’s New Brunswick assets, including the Murray Brook and Caribou properties and the Caribou processing plant. Operations could begin in late 2028, with BMO modeling first production in 2029.

Threats

• The CUSMA rapid response mechanism is doing exactly what it was designed to do, creating real legal and reputational pressure on a Canadian company for labour violations in Mexico, but the cartel angle elevates this from a labour dispute to potential criminal liability territory. Orla Mining’s exposure is compounding, with a formal panel finding of employer interference, an active security review, calls for a criminal complaint under Canada’s terror designation of the Sinaloa cartel, and a stalled Canadian federal complaint that could still be activated.
• Western Australia is considering a strategic diesel stockpile paid for by the state after the Iran war led to shortages for key industries such as farming and mining. Energy Minister Amber-Jade Sanderson said the reserve would be directed at areas of need at the discretion of the state government, with more details expected in the coming weeks.
• Evolution Mining’s third quarter fiscal year 2026 result was slightly weaker than consensus, with weather impacts at Ernest Henry continuing after a prior quarter disruption. Production rates and all-in sustaining costs softened, though guidance was maintained and the company expects improved performance in the fourth quarter, according to CLSA.

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