JPMorgan Cuts Gold Forecast, Sees $4,500 Peak by Year-End
Synopsis
JPMorgan has lowered its gold price forecast, projecting the precious metal will reach $4,500 an ounce in the fourth quarter while warning that earlier-than-expected U.S. interest rate hikes could pose downside risks.
JPMorgan has downgraded its forecast for gold prices, stating that the recent run-up will ease off in the months ahead as weakening demand and the course of U.S. interest rates are watched carefully.
In its Global Commodities Research note, the firm now forecasts gold to average US$4,300 an ounce in the third quarter of 2026, then rise to US$4,500 an ounce in the fourth quarter, which is significantly below the firm’s June projection that saw prices reach US$6,000 an ounce by year-end.
The change in the forecast follows the firm’s observation of weaker demand within key sectors of the physical gold market. JPMorgan also noted that gold has become increasingly reactive to changes in real interest rates, which track the cost of borrowing after adjusting for inflation.
Since gold is non-income-producing, high real yields tend to diminish its attractiveness against income-generating assets.
Central Bank Buying Continues to Provide Support
As far as near-term forecasts have been revised downwards, JPMorgan keeps its long-term forecast unchanged, saying that gold may see an upturn again starting with the end of 2026 and continuing throughout 2027. This is due to persistent buying from central banks and robust physical demand.
According to recent numbers in the Gold Demand Trends Q1 2026 report from the World Gold Council, there are some signs of solid demand dynamics.
Global demand for gold, both OTC and otherwise, grew by 2% year on year to 1,231 tons, and demand value reached record US$193 billion, helped by strong bullion prices. The investment demand for gold bars and coins increased by 42%, largely driven by Asian investors.
There has also been quite a lot of activity from central banks. As per the data of the World Gold Council, countries such as China, India, Poland, and Turkey have been accumulating gold in their reserves in an attempt to diversify investments into other assets from the conventional ones.
Interest Rate Path Remains the Key Risk
According to JPMorgan, the biggest risk factor for its new forecast is the scenario where stronger-than-expected economic performance in the United States will cause the Fed to hike interest rates earlier than anticipated. The reason is that higher interest rates tend to make fixed income securities more appealing than gold.
Gold futures were trading at US$4,174 per ounce on July 3, marking an increase of about 1.3 percent for the day and almost 2 percent for the week.
Moreover, the bank provided its forecasts for other precious metals as well. Silver would trade between US$60 and US$65 per ounce on average, platinum, about US$1,800 per ounce by the end of 2026 thanks to supply limitations in South Africa, and palladium would be worth US$1,350 per ounce on average.
Source: Reuters
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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