After the initial turmoil in the first three weeks of April, global brokerage firm JP Morgan has issued a revised outlook on gold prices, predicting an average of $3,675 per ounce by the fourth quarter of 2025 and a breaching of the $4,000/oz level by the second quarter of 2026.
The firm cited deepening macroeconomic concerns and rising geopolitical instability as the primary drivers behind the projected price surge. In its note, JP Morgan stated, “Tariff-driven recession and stagflation risks are forecasted to continue to supercharge gold’s structural bull run.”
Central Banks and Investors Drive Growth
The foundation of JP Morgan’s gold outlook lies in the robust quarterly buying patterns supported by central banks and investors. According to its analysis, “a breakeven demand level (for prices to stay flat qoq) is around 350 tonnes or more of quarterly net demand from investors and central banks.”
- Central banks are expected to remain aggressive buyers in 2025, with JP Morgan forecasting 900 tonnes in annual purchases.
- The investment bank’s sensitivity model shows that every 100 tonnes of qoq increase in holdings from investors and central banks is worth around a 2% qoq increase in the price of gold.
Policy and Geopolitical Risks Fuel Central Bank Buying
JP Morgan highlighted the reasons behind central bank demand, pointing to persistent global uncertainties. “For central banks, the combination of economic, trade, and US policy uncertainty, as well as shifting, more unpredictable geopolitical alliances, will continue to fuel gold buying in our view,” it said.
| Category | Description |
|---|---|
| Economic Uncertainty | Global economic uncertainty, including trade tensions and US policy uncertainty, fuels central bank buying. |
| Geopolitical Risks | Shifting geopolitical alliances and increased probabilities of recession contribute to central bank buying. |
| Tariffs and Trade Conflict | Increased tariffs and the ongoing US-China trade conflict exacerbate volatility and drive demand for gold. |
Gold as a Hedge Against Stagflation, Recession, and Currency Debasement
JP Morgan identified gold as one of the few remaining reliable hedges against a growing list of global financial risks. “For investors, we think gold remains one of the most optimal hedges for the unique combination of stagflation, recession, debasement and US policy risks facing markets in 2025 and 2026,” the note said.
Broadening Investor Participation and Chinese Demand
JP Morgan expects broadening investor participation to support gold’s continued ascent. “We see the potential for new entrants into gold to further expand the investor pool while Chinese retail investor demand stays strong amid the potential for a weaker CNY,” it noted.
- Chinese retail investor demand remains strong, driven by the potential for a weaker CNY.
- New entrants into the gold market are expected to further expand the investor pool.
Bear Case for Gold
JP Morgan believes that intense investor derisking was one of the main bearish risks it cited previously. However, the firm thinks that the current scenario is far-fetched and would spark a sharp and sustained investor rotation out of gold.
“In our view, more materially bearish would be a scenario where US economic growth remains extremely resilient to tariffs, allowing the Fed to turn much more proactive in fighting inflation risks, prompting markets to price in hikes even before worrying inflation actually arrives,” the brokerage firm stated.
Conclusion
JP Morgan’s forecast is built on a combination of robust quarterly buying patterns, central bank behavior, and macroeconomic pressures. The firm believes that gold will reach $3,675/oz by the fourth quarter of 2025 and $4,000/oz by mid-2026, driven by the unique combination of stagflation, recession, debasement, and US policy risks facing markets in 2025 and 2026.
By expanding on the ideas and details presented in the original article, we have provided a comprehensive and engaging overview of JP Morgan’s forecast for gold prices in 2025 and 2026.
The article highlights the key drivers behind the projected price surge, including deepening macroeconomic concerns and rising geopolitical instability.
