JP Morgan Predicts Golden Era: Gold Prices Set to Soar Amid Economic Uncertainty

JP Morgan projects gold as the most reliable hedge through 2025 and 2026, given risks of stagflation, recession, and U.S. policy uncertainties. Demand is expected to drive prices, potentially exceeding forecasts as central banks and investors boost their holdings.

JP Morgan, a leading force in global investment banking, has reiterated its optimistic outlook on gold, advocating it as the prime hedge in the looming economic landscape of 2025 and 2026. The report underscores concerns regarding stagflation, impending recession, currency weakening, and uncertainties surrounding U.S. policies.

The surge in gold prices during the first quarter of 2025 is perceived as a testament to investors' confidence. JP Morgan forecasts that net demand for gold from investors and central banks will average 710 tonnes per quarter, a significant rise from the 350 tonnes required to stabilize prices.

The analysis indicates that a 100-tonne increase in quarterly demand could elevate prices by 2%. Central banks are expected to acquire around 900 tonnes in 2025, and demand from exchange-traded funds (ETFs) and Chinese investors is set to rise. The macroeconomic environment is conducive to prolonged central bank purchases and expanding investor interest.

U.S. tariff increases and trade tensions with China are cited as primary drivers for slowing economic growth, intensifying stagflation—a mix of slow growth and high inflation. This supports a bullish trend in gold prices, with the bank predicting a gradual increase in value over time.

The report revises the gold price forecast, projecting an average of USD 3,675 per ounce by the fourth quarter of 2025, and possibly exceeding USD 4,000 by mid-2026. Persistent global economic tensions and recession risks are expected to fuel this upward trend. The demand surpassing current forecasts could propel prices beyond expectations sooner than anticipated.

(With inputs from agencies.)