JPMorgan Cuts 2026 Gold Forecast but Maintains Long-Term Bullish Outlook
JPMorgan has lowered its average gold price forecast for 2026, citing weaker short-term demand and softer investor positioning. Despite the revision, the bank remains optimistic about gold’s long-term prospects and still expects prices to potentially reach $6,000 per troy ounce by year-end under its broader bullish outlook.
The investment bank reduced its 2026 average gold price target to $5,243 per ounce, down from the previous forecast of $5,708.
Weak Investor Demand Weighs on Gold in the Short Term
According to JPMorgan analysts led by Gregory Shearer, investor interest in gold has cooled considerably in recent months.
Gold prices are currently trading between key technical levels, with the 200-day moving average near $4,340 per ounce and the 50-day moving average around $4,730. Meanwhile, activity in gold futures and ETF inflows has remained relatively subdued.
Analysts noted that gold has moved into the background for many investors as concerns grow that the Federal Reserve may need to respond to rising energy-driven inflation through additional interest rate hikes.
Higher interest rates generally reduce the appeal of non-yielding assets such as gold.
JPMorgan Still Expects Gold to Recover
Despite lowering forecasts, JPMorgan emphasized that the slowdown reflects a temporary pause rather than a major shift in long-term fundamentals.
The bank maintained its bullish thesis, which is supported by several ongoing factors, including:
- Fiscal and debt-related risks
- Currency debasement concerns
- Geopolitical tensions and fragmentation
- Uncertainty surrounding U.S. policy direction
However, analysts said stronger conviction may return only after greater clarity emerges regarding the Iran conflict.
Strait of Hormuz Could Become a Major Catalyst for Gold
One of the key developments JPMorgan is monitoring is the possible reopening of the Strait of Hormuz.
The bank’s energy analysts expect progress as early as June. A reduction in geopolitical tensions could ease inflation concerns, weaken the U.S. dollar and lower real bond yields — conditions that historically support higher gold prices.
Under this scenario, JPMorgan expects gold to rebound toward the $4,900–$5,100 range, representing important technical resistance levels.
The bank also believes investors who recently reduced exposure to gold may begin returning to the market during the second half of the year, potentially accelerating demand again.
Central Bank Buying and ETF Demand Forecasts Reduced
JPMorgan lowered expectations for central bank gold purchases in 2026, now projecting demand of 640 tonnes compared with an earlier estimate of 800 tonnes.
The revision follows weaker reported buying activity during the first quarter, when net purchases totaled only 16 tonnes amid increased selling.
However, broader estimates from the World Gold Council and Metals Focus suggest total buying activity — including unreported purchases — still reached approximately 244 tonnes during the quarter.
The bank also reduced its forecast for gold ETF inflows to around 400 tonnes for the year, down from 580 tonnes previously.
Even so, global gold ETF holdings have increased by roughly 108 tonnes since the beginning of the year.
Stronger U.S. Economy Could Become the Biggest Risk for Gold
JPMorgan identified a resilient U.S. economy as one of the biggest threats to its gold outlook.
Analysts warned that if strong employment data and accelerating inflation force the Federal Reserve into a prolonged cycle of interest rate hikes, Western gold ETFs could experience continued outflows.
Such a scenario could limit upside potential for gold prices over the medium term.
