A new high? | Gold price predictions from J.P. Morgan Research

J.P. Morgan Research maintains a strong structural bull case for gold, raising price targets to an average of $3,675/oz by Q4 2025 and projecting $4,000/oz by Q2 2026, following a significant 30% year-to-date rally. This revised outlook is driven by persistent policy uncertainty, heightened geopolitical risks, and increasing recession probabilities, positioning gold as an optimal hedge against stagflation, debasement, and U.S. policy risks. The forecast is underpinned by continued robust demand from central banks, projected at 900 tonnes in 2025 for diversification away from the USD, alongside substantial investor inflows into ETFs and futures markets.

Analysis

J.P. Morgan Research has significantly raised its gold price targets, now forecasting an average of $3,675/oz by Q4 2025 and a climb towards $4,000/oz by Q2 2026. This follows a robust 30% year-to-date rally, which saw gold peak at $3,500/oz in April 2024, surpassing earlier projections. The firm maintains a strong structural bull case for the precious metal.

The revised outlook is primarily driven by persistent policy uncertainty, heightened geopolitical risks, and increasing recession probabilities. Gold's traditional safe-haven status, coupled with its role as a debasement hedge against inflation and currency depreciation, underpins its appeal in the current macro environment. Unpredictable U.S. trade policy and ongoing trade/tariff risks further contribute to this positive sentiment.

The bullish forecast is supported by sustained strong demand from both central banks and institutional investors. Central banks are projected to purchase approximately 900 tonnes in 2025, driven by diversification away from U.S. dollar reserves. Investor demand is also robust, evidenced by significant year-to-date ETF inflows of 310 tonnes and record non-commercial futures long positions.

J.P. Morgan views gold as an optimal hedge for the unique combination of stagflation, recession, debasement, and U.S. policy risks anticipated in 2025 and 2026. The firm suggests risks are skewed towards an earlier overshoot of their forecasts if demand continues to exceed expectations.

Key Decisions for Investors

• Investors should consider maintaining or increasing strategic allocations to gold, given its projected role as an optimal hedge against stagflation, recession, and geopolitical risks.
• Monitor central bank purchasing trends and ETF inflows as key indicators for sustained demand and potential price overshoots.
• Evaluate gold's low correlation with other asset classes for portfolio diversification benefits amidst ongoing market uncertainty.