Gold up to $4,400, silver down to mid-$40s, but PGMs will lead the pack in 2026 – TD Securities

NEW YORK (December 4) Lower interest rates, ongoing currency debasement, supply side dynamics and the need for diversification will support commodities and drive gold to a new high above $4,400 in the first half, and while silver prices are likely to moderate to the mid-$40s, 2026 will be the year where platinum and palladium lead the pack, according to commodity analysts at TD Securities.

In their 2026 commodities outlook, TD Securities said they don’t predict a rout for gold in the cards next year, and instead expect to see new all-time highs.

“The Fed-driven carry cost reductions, along with an expected yield curve steepening and potential concerns surrounding Fed independence, prompt us to say that the yellow metal will reach a new quarterly record of $4,400/oz in the first six months of 2026,” they said. “Looming concerns that the future Fed may not aggressively pursue a 2% inflation target, along with speculation the White House could aggressively lobby for lower rates at a time US debt is at record highs and growing, is a very important reason why we think the bullish gold trend will reassert itself.”

The analysts said these factors will continue to drive U.S. dollar debasement, de-dollarization, and de-globalization, which in turn will support strong central bank gold purchases. “Meanwhile, the start of a broad movement away from classic 60-40 portfolio structure to an asset mix which includes as much as a 25% commodity weighting, along with lower rates, should see investors increase their appetite for the yellow metal,” they said.

“While concerns the Fed may not cut at every upcoming meeting, a firmer USD, China's reduced VAT exemption of 6% for gold bought via the SGE or SHFE through 2027, and recent overbought conditions may emerge again, we don’t expect a rout from the late-November high of over $4,225/oz,” they wrote. “Indeed, fundamentals are broadly supportive. We see gold moving materially over the $4,400/oz mark into 2026, once it becomes apparent that the US central bank is continuing with the easing cycle amid a weaker economy, materially above-target inflation, and a Fed that likely will be filled with doves.”

TD believes gold's new long-term range will be between $3,500-4,400 per ounce. “For prices to stay below the lower end of that range, it would take a shift in investor attention back to rising US risk asset prices, or a view change that the US job market will not weaken and no further Federal Reserve rate cuts are on the way,” the analysts said. “The absence of the US dollar debasement, de-dollarization and monetization narratives could also do the trick. But we predict the employment environment will weaken, risk markets may have a difficult time rallying next year, and we expect the US central bank to cut an additional 100bps, with 150bps expected by some in the market, even as inflation stays stubbornly above the two percent target. The yellow metal should appreciate into 2026, given lower interest rates at a time inflation is materially above target, US debt rising alarmingly fast, and growing fears that the world will have less need for US dollars and thus less capacity to purchase Treasuries given a high tariff environment.”

They added that U.S. government debt is rising even faster since the passage of the One Big Beautiful Bill Act. “There is also a risk that tariffs may be judged to be illegal, and the government will need to rebate the revenues it collected, putting further focus on funding the deficit,” they said. “The prospect of trillions in European government bonds competing for capital also suggests that, given no clear way for the US to close the fiscal gap, the US cannot manage to keep long rates from spiking without some form of aggressive liquidity measures, which some will equate to operation twist of the past or a form of quantitative easing. This, along with concerns surrounding Fed independence, as the FOMC is filled with relative policy doves, will be a strong driver of appetite for the metal.”

As a result, the analysts expect central banks, ETF investors and traders will all place strong bids on gold. “Consequently, we project the average quarterly price to hit a record $4,400/oz in the first six months of 2026, with trading peaks considerably above those levels,” they said.

Turning to silver, TD Securities said that if you liked the #silversqueeze, you have to like the #silverflood.

“At the start of this year, the market was sleepwalking into a #silversqueeze, even as the set-up transitioned away from a demand boom towards a liquidity crisis in physical markets,” they wrote. “Heading into 2026, an epic-scaled #silverflood has resulted in the single largest wave of repletion in LBMA free-floating inventories on record. With more than 212mn oz of silver now likely freely-available in the LBMA's vaults, London silver markets have already unwound a year's worth of drain in London inventories.”

“This amount covers nearly two years' worth of global deficits, with evidence that we have reached the strike price necessary to open the taps from scrap and private vaults,” they noted.

The analysts said this massive replenishment should have a big impact on the outlook for silver because the price no longer needs to rise to refill global inventory pools.

“Yet, prices haven't collapsed post #silverflood,” they said. “Lease rates have collapsed from historic levels, but prices haven't. Prices have only traded violently near ATHs, clashing with a statistically significant relationship between commodity vol and inventories. Since the #silversqueeze, however, trading volumes for spot silver have aggressively subsided (-65% from Oct highs at time of writing), potentially fueling a liquidity vacuum which has left precious metals markets vulnerable to gamma hedging flows. This is corroborated by ETF vols now trading more expensive than Comex vols, reversing a post-Covid trend and potentially signaling that speculative demand has increased substantially beyond that of basis trades over the last months. Further, 3m call skews on popular silver ETFs are now trading at their highest levels since the original retail #silversqueeze moment in 2022Q1, which preceded a severe drawdown in prices.”

The analysts also said that tight Shanghai exchange inventories “are a function, not a symptom, of the #silverflood, as Shanghai has emerged as a backstop to London over the last months.”

“Case in point: the Shanghai import arb window remains firmly closed,” they noted. “Considering invisible stocks within China are likely multiples larger than those on-exchange, tightness in Shanghai will be self-resolving amid incentives to return metal on-exchange.”

TD believes this will end the current chapter of the silver squeeze. “The next chapter in the #silversqueeze saga will necessitate (1) a more significant erosion of above-ground inventories in Shanghai and New York, or (2) forms of export controls that could inhibit rebalancing mechanisms, including section 232 tariffs, or more stringent export controls in China,” they said. “Liquidity has returned to London, which represents a correction risk from the late-November highs.”

However, the analysts do not expect any tariffs on silver as a repricing catalyst. “The stockpiling trend has already run its course, they wrote. “The President must now make a determination regarding the Section 232 critical minerals investigation by mid-January. Barring tariffs on silver, silver markets are facing rising global visible inventories, a significant deterioration in industrial demand (-2% y/y), including from solar cells (-5%) despite rising aggregate solar capacity, jewelry (-4%), silverware (-11%) and even global physical investment (-4%). At the same time, silver's debasement-hedging properties pale in comparison to gold's, suggesting that even an unlikely scenario of forced/quick-debasement, silver will underperform gold.”

TD Securities expects silver prices to start the year in decline, and they say the gray metal will be hard pressed to get back to current levels in 2026. “Hence, our mid-$40s projection next year.”

TD’s outlook is very different for the platinum group metals, however, where their bullish case clashes with the prevailing views in the market.

“Consensus believes ‘Peak Internal Combustion Engine’ is structurally eroding autocatalyst demand, compounding affordability concerns largely associated with US tariffs,” the analysts said. “Analysts believe a boom in scrap supply is forthcoming, leaving the expected deficit in PGMs shrinking, potentially even towards a small primary surplus. The consensus expects these forces to normalize PGM markets from critically tight levels that have been fueled by one-off Chinese and US stockpiling trends.”

But their own research indicates the opposite. “TD Cowen's proprietary vehicle density survey points to strong tailwinds for North-American auto demand, driven by growth in household fleets, which is underscored by a continued de-urbanization trend,” they wrote. “We emphasize that small changes in vehicle density can result in immense changes in auto sales and associated PGM demand: all-else equal, the difference between density falling 2% and rising 2% over a year could equate to a 420koz swing in platinum demand and 1.7moz swing in palladium demand.”

“In turn, while consensus is concerned about affordability, largely relating to tariff-related price shocks, we think expectations for a decline in North American auto sales are unfounded, based on our +0.9% forecast for US vehicle density,” they added. “Our global growth outlook also remains on a strong footing, which further delegitimizes concerns about global demand ex-US. Further, US new vehicle inventories remain low, which points to a more notable strengthening in auto production from the region.

TD Securities also predicts further delays to the expected scrap boom. “Importantly, rising vehicle density compounds demand-related beats with headwinds for scrap supply on the horizon,” the analysts said. “We expect the recovery in scrap to be delayed until 2027, leading to substantial upcoming revisions to consensus scrap estimates for one of the most globally important regions for secondary autocatalyst supply.”

“In fact, rather than the consensus 14% increase in NorthAm pt autocatalyst scrap supply (50koz) and 16% (170koz) pd scrap supply, we expect aggregate scrap supply from the region to remain largely unchanged, they emphasized. “Combined with strengthening demand, and a structural underinvestment in mine supply, this should keep the fundamental outlook both on solid footing and more severely tilted towards structural deficits for years to come.”

Unlike silver, TD analysts see a very real possibility of U.S. tariffs on PGMs related to the S232 critical minerals investigation, “but that these could be negotiated away for ‘politically aligned partners’ at a later date.”

“In this scenario, a deferred implementation date could potentially catalyze a #platinumsqueeze & #palladiumsqueeze akin to the #silversqueeze you can buy into observed in 2025,” they warned. “Such risks are prevalent for the PGM complex, but are currently particularly underappreciated in palladium.”

TD Securities analysts have chosen platinum and palladium as their top commodity picks for 2026, with TD’s price forecast approximately 20% higher than the market consensus. “The macro set-up remains strong, underscored by continued de-urbanization trends with significant implications for resulting PGM demand, alongside a strong argument for continued stockpiling trends into 2026,” they concluded. “Expect higher platinum and palladium prices, tighter forwards, higher lease rates.”

KitcoNews