JPMorgan warns: Bullish trend driven by risk aversion and central bank gold buying comes to an end! Significantly lowers gold price forecast for the year
J.P. Morgan's latest precious metals report clearly states that the previous bullish phase driven by risk-aversion sentiment and active central bank gold purchases has come to an end. As central bank gold buying, Asian physical demand, and retail buying momentum have all cooled off, gold ETF capital flows—which are sensitive to interest rates—have once again become the main driver of gold prices movements. The negative correlation between gold and US real interest rates has strongly reemerged after years of dormancy. This means the rise and fall of gold prices are once again closely tied to the Federal Reserve's next policy moves.
Although the short-term outlook has turned more cautious, the bank has not abandoned its long-term bullish stance: it expects the aforementioned structural forces to regain traction in 2027, driving gold prices higher quarter by quarter. It forecasts $4,600 for the first quarter, $4,700 for the second quarter, $4,800 for the third quarter, and $5,000 for the fourth quarter, with an annual average expected to reach $4,775. However, this is premised on a more substantial dovish shift from the Federal Reserve.
Editor: Zhang Hengxing
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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