Could the price of gold reach $5,000? JP Morgan thinks so and this is the reason why
The price of gold has stabilized for the time being but its tremendous growth over the past couple of years, more than double, is expected to continue.
The price of gold has retreated from its record peak above $4,380 per ounce in October, but still remains well over double its value just two years ago. The spectacular growth has been driven by the Fed’s easing of monetary policy, economic concerns, de-dollarization, and geopolitical tensions.
Spot prices for the precious metal are currently holding steady at around $4,125 per ounce as investors wait for a vote in the House of Representatives that could reopen the federal government after the longest shutdown in US history. “Everyone is awaiting more clarity on the government shutdown and when the data is coming out of the US again,” explained UBS analyst Giovanni Staunovo to Reuters.
JP Morgan forecasts gold surpassing $5,000
Gold futures have risen slightly ahead of the vote in Congress as analysts like Staunovo still see an upward trend. “Nothing from the structural side has completely changed,” he said.
The rapid upsurge in prices this year, rising over 50% over the past 12 months, has been on the back of large acquisitions by central banks. In the year through September, they have purchased 634 tons of bullion reports Bloomberg citing data from the World Gold Council.
While that is less than the annual amount since 2022, which surpassed 1,000 tons, it still exceeds the 2016-2021 annual average.
JP Morgan sees this trend continuing and predicts that the price of gold could jump more than 25% by the end of 2026. That would take its price into the range of $5,200 to $5,300, according to Alex Wolf, the private bank’s global head of macro and fixed income strategy, as he stated in a note on Wednesday.
Goldman Sachs had a more modest outlook for the future of gold prices, but it was still forecasting that gold will hit $4,900 per ounce by December 2026.
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