(Kitco News) – Gold and silver are in once-in-a-lifetime bull markets, but one portfolio manager warns that even though they are on track to hit $10,000 and $300 an ounce respectively in the next few years, investors should prepare themselves for a volatile ride.
Last week, AuAg Funds published its 2026 outlook, and the analysts said they expect gold prices to push decisively above $6,000 an ounce this year, and see silver prices reaching $133 an ounce – which would put the gold/silver ratio back to last month’s multi-year low of 45.
The outlook comes as gold prices hit a high near $5,600 an ounce last month and then rapidly dropped 20%. After testing support near $4,400 an ounce, gold has managed to find some balance around $5,000 an ounce.
The Swedish investment company said that in a bull market, investors should expect to see 20% to 30% swings in prices.
“These are often orchestrated pullbacks that occur when markets become truly frothy. Large short positions are used to force prices lower, speculators are shaken out, and weak hands begin selling. The buyers are often the same players who initiated the decline — the so-called ‘strong hands’ seeking attractive entry points for the next leg of the bull market,” the analysts said.
Despite the expected volatility, analysts at AuAg Funds see a powerful set of structural forces driving the outlook. They noted that global debt continues to expand, now approaching $350 trillion.
At the same time, the analysts said it is only a matter of time before global debt is monetized, with central banks, led by the Federal Reserve, cutting interest rates while simultaneously launching new quantitative easing measures to suppress long-term yields.
The analysts also said that gold remains an attractive alternative global currency as confidence in the U.S. dollar gradually erodes, alongside the continuation of the currency debasement trade.
With aggressive fiscal and monetary stimulus occurring simultaneously and bond markets becoming increasingly difficult to navigate, AuAg argues that capital rotation into gold is accelerating, given the metal’s high return potential, low correlation to equities, and lack of counterparty risk.
“Over the long term, gold responds to the number of fiat currency units being created beyond real economic growth,” the analysts said. “It is important to emphasize that real growth is not the same as reported GDP figures, as modern GDP calculations include significant unproductive spending categorized as growth. Countries are creating more currency but generating less real output per unit of debt. This dynamic is precisely why gold continues to rise at an accelerating pace.”
Meanwhile, they believe silver has significantly more potential, as prices could still double in the current environment. AuAg Funds noted that, along with its role as a monetary metal, silver will see strong fundamental support as an industrial metal.
“After several years of supply deficits relative to demand, the market is approaching a situation that could have a significant impact on price formation. A physical shortage has the potential to double the price of silver within a very short period. Demand for silver is also highly inelastic. No matter how much the price increases, it is highly unlikely there will be any meaningful decline in usage. This is partly because silver’s properties are irreplaceable, and partly because silver typically represents only a small portion of the total cost of finished products,” the analysts said.
Along with exposure to the raw commodity, the investment firm sees robust potential in mining equities.
“Gold mining stocks performed very strongly in 2025, as we anticipated. Yet despite these gains, valuations remain lower than before last year’s major rally,” the analysts said. “If gold prices remain at current levels or continue rising, today’s share prices still do not fully reflect those higher price assumptions. This creates the potential for explosive upside in mining equities, potentially far exceeding the percentage change in gold itself. Silver remains undervalued relative to gold, and as a result, silver mining companies remain undervalued relative to gold miners.”