JP Morgan sees gold prices averaging $5,055 per ounce by late 2026

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(Reuters) -JP Morgan analysts on Thursday maintained a bullish outlook on gold, forecasting prices could reach an average of $5,055 per ounce by the fourth quarter of 2026.

The forecast is based on “demand assumptions that see investor demand and central bank buying averaging around 566 tons a quarter in 2026,” the bank said in a note.

“Gold remains our highest conviction long for the year, and we see further upside as the market enters a Fed rate-cutting cycle,” Natasha Kaneva, Head of Global Commodities Strategy at JP Morgan, said.

The combination of a “Fed cutting cycle with overlays of stagflation anxiety, concerns around Fed independence, and broader debasement hedging” supports gold’s upside, Gregory Shearer, Head of Base & Precious Metals Strategy said.

On the dollar, the bank noted that the rally is “not a de-dollarization or not a debasement story, but it is most likely a dollar diversification story,” highlighting that foreign holders of U.S. assets are gradually redirecting small allocations into gold.

JP Morgan analysts also highlighted that recent market consolidation is healthy.

The pullback reflects the market digesting the rapid price gains since August, said Kaneva.

“It’s normal if you’re paralyzed with fear, because the price moved so fast … It’s just a very clean story – you have a lot of buyers, and you have no sellers,” she said.

She reiterated a long-term target of $6,000/oz by 2028, stressing that gold should be viewed on a multi-year horizon.

Spot gold has achieved several record highs this year, with the latest peak of $4,381.21 hit on Monday, marking a significant year-to-date gain of nearly 57% and setting the stage for its strongest annual performance since 1979. [GOL/]

(Reporting by Sherin Elizabeth Varghese and Anmol Choubey in Bengaluru; Editing by Susan Fenton and Joe Bavier)