Gold bulls are getting a reminder that geopolitical turmoil does not automatically lift bullion. At times, the inflation and interest-rate consequences of a shock overwhelm the safe-haven bid — and at times the whole point of accumulating gold reserves is to deploy them when a crisis such as a war strikes.

That tension runs through the latest precious metals outlook from the Canadian Imperial Bank of Commerce (CIBC), one of Canada's largest banks. The bank has sharply lowered its forecasts as higher energy prices, a stronger US dollar and a more hawkish Federal Reserve complicate the trade, though it still anticipates a substantial recovery over the next two years.

In its October report, CIBC cut its average gold forecast for 2027 to US$5,200 an ounce from $6,500. Its 2028 estimate fell to $5,500 from $6,000, while the fourth-quarter 2026 projection dropped to $4,500 from $6,500.

The revisions are sizeable, yet they still leave CIBC comfortably above the consensus estimates included in the report: $4,620 for 2027 and $4,451 for 2028 — a gap that places the bank among the more constructive forecasters on the metal.

“Despite this monetary policy headwind, we believe elevated geopolitical risk, fiscal concerns and continued diversification away from US Treasuries will underpin gold demand and support a recovery through 2027 and 2028,” CIBC writes.

Gold is trading at $4,147, more than 25% below its early-year peak near $5,600. Measured against that reference point, CIBC's 2028 average forecast implies a recovery of roughly 29%. The difficulty lies in the path there.

The report describes a market in which the US-Iran conflict has boosted demand for protection while simultaneously driving oil prices and inflation expectations higher. That dynamic has strengthened the dollar and pushed the Fed toward tighter policy, undermining a non-yielding asset. Because gold is priced in dollars and pays no income, a firmer currency and higher real yields both raise the opportunity cost of holding it — the channel through which monetary policy feeds most directly into bullion. For traders, the combination is awkward: more geopolitical risk can support gold, but another energy-price shock could also reinforce the very rate expectations holding the metal back.

CIBC identifies a potential way out. “In our view, gold could benefit if economic growth weakens or inflation moderates sufficiently to allow the Fed to pivot toward a more accommodative policy path than is currently reflected in market expectations or the FOMC's projections,” the bank writes.

That framing puts inflation and growth data squarely in focus, and a sustained recovery would be easier with some relief in real yields and the dollar. The calendar to watch is the recurring set of US inflation releases, labor-market reports and updated Fed projections that shift expectations for the policy path, alongside regularly published gold ETF holdings and central-bank purchase data that reveal whether investment demand is actually materializing.

A significant investment-demand assumption also underpins the bullish forecasts. CIBC projects gold ETF demand of 1,000 tonnes in each of 2027 and 2028, compared with just 35 tonnes in 2026, and expects central-bank purchases to reach 1,000 tonnes annually in both years. The scale of that swing makes investment and official-sector flows the decisive variable in the bank's recovery scenario.

Silver takes an even bigger near-term downgrade. CIBC cut its 2027 forecast to $85 an ounce from $120, though that remains well above the report's $66 consensus estimate.

Copper moved in the opposite direction, with CIBC raising its forecast to $6.50 a pound for the fourth quarter and for both 2027 and 2028. “Demand growth is increasingly driven by grid modernization, electrification, renewable energy and digital infrastructure while new supply remains constrained by long development timelines, capital inflation and operating disruptions,” the report notes.

The distinction is useful: copper's upgraded outlook rests on physical demand and constrained supply, while gold's recovery depends more heavily on investment flows and how the monetary-policy backdrop evolves. For anyone tracking the metals complex, it also shows the bank differentiating among commodities by their underlying drivers rather than shifting its entire outlook in one direction.