JPMorgan Sees Gold Rallying to $6,300 by Year-End Despite Market Turbulence
Gold's dramatic sell-off last week, sparked by President Trump's nomination of Kevin Warsh to lead the Federal Reserve, sent shockwaves through commodity markets. Yet, analysts at JPMorgan are urging clients to look beyond the short-term volatility, doubling down on a forecast that sees the precious metal soaring to $6,300 an ounce by the end of 2026.
In a note to clients, the bank's global commodities team, led by Gregory Shearer, acknowledged the "stumble" but framed it as a temporary setback. The updated target implies a potential gain of roughly 34% from Monday's levels around $4,700. The plunge was largely attributed to a rapid reassessment of the "debasement trade"—a bet against currency devaluation that had fueled gold's record run.
"The fundamental picture for gold remains robust, arguably stronger than the price action suggests," Shearer stated. He emphasized that demand, particularly from central banks continuing to diversify reserves away from the US dollar, is running ahead of expectations. This structural demand, coupled with gold's entrenched role as a portfolio hedge, is expected to overwhelm near-term speculative positioning washouts.
"We are witnessing a demand environment stressing inelastic supply," the note explained. "Prices are being pushed higher in a sustained search for a new market equilibrium." The analysts believe this dynamic will hold regardless of the monetary policy path under a Warsh-led Fed, underscoring gold's perceived resilience to macro shifts.
In contrast, the bank struck a more cautious tone on silver, noting difficulty in pinpointing its near-term drivers and suggesting some "froth" needs to clear. They posit that capital rotating out of silver may ultimately benefit gold.
Market Voices:
"This call from JPMorgan is a necessary counter-narrative," said David Chen, a portfolio manager at Horizon Wealth. "It forces us to separate knee-jerk political reactions from the deeper, multi-year trend of de-dollarization. The central bank buying story is very real."
"A 34% surge from here? It's pure fantasy designed to keep the bullion machine humming," retorted Maya Rodriguez, an independent metals trader. "They're completely dismissing the impact a hawkish Fed chair could have. This isn't analysis; it's institutional hopium ignoring last week's warning shot."
"The data on central bank purchases is undeniable," added Arjun Kapoor, a strategist at FinSec Advisors. "While the target is aggressive, the direction makes sense. The key question is whether investor ETF flows can re-engage as strongly as institutional demand."
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