JP Morgan sees gold prices crossing the $4,000 per ounce milestone next year, following increased recession probabilities amid boosted U.S. tariffs and an ongoing U.S.-China trade war, the bank said in a note Tuesday.
The bank now expects gold prices to reach an average of $3,675/oz by 4Q25, on the way towards above $4,000/oz by 2Q26, with risks skewed towards an earlier overshoot of these forecasts if demand surpasses its expectations.
"Underpinning our forecast for gold prices heading towards $4,000/oz next year is continued strong investor and central bank gold demand averaging around 710 tonnes a quarter on net this year," the bank noted.
Spot gold, which has gained 29% and hit 28 record highs this year, touched the $3,500 per ounce milestone for the first time on Tuesday. Earlier this month, Goldman Sachs raised its end-2025 gold price forecast to $3,700/oz from $3,300, noting that in "extreme tail scenarios," gold could plausibly trade near $4,500/oz by end-2025.
In terms of a potential bearish case for gold, an unexpected drop off in central bank demand remains the biggest fundamental risk, the bank said.
"More materially bearish would be a scenario where U.S. economic growth remains extremely resilient to tariffs allowing the Fed to turn much more proactive in fighting inflation risks, prompting markets to price in hikes even before worrying inflation actually arrives," analysts noted.
JP Morgan also predicts greater headwinds for silver in the near-term given industrial demand uncertainty, while a "catch-up window" will open over the second half of 2025 with prices set to rise towards $39/oz by 2025-end.
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