Gold will hit $4000 in one year! Will this JP Morgan prediction come true?

Time of India

22-05-2025

Gold prices are regaining momentum amid economic uncertainty and rising fiscal concerns. While JP Morgan projects a surge to $4,000/oz by Q2 2026, analysts at Reliance Securities see potential for a climb to $3,800/oz within 9–12 months. With safe-haven demand intact and central bank buying strong, the outlook for gold remains bullish despite recent price dips.
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JP Morgan predicts gold to surge up to $4,000
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The prices of gold were sparkling not long ago, as rising geopolitical uncertainties boosted the demand for the safe-haven asset. When domestic gold prices surged to Rs 1 lakh/10 grams, global brokerage firm JP Morgan predicted that the yellow metal prices would shoot up to $4,000 in the international markets by the second quarter of 2026.However, the recent easing of geopolitical tensions has led to a pullback in safe-haven buying, causing gold's rally to lose momentum.In such a scenario, what is the outlook for gold now? Is there more steam left in the yellow metal?Earlier in April, projected gold prices to an average of $3,675 per ounce by the fourth quarter of 2025, and to cross the $4,000/oz level by the second quarter of 2026.The global investment bank had cited deepening macroeconomic concerns and rising geopolitical instability as key reasons behind the projected price surge.In its note, JP Morgan had stated, 'Tariff-driven recession and stagflation risks were forecasted to continue to supercharge gold's structural bull run.'The forecast was built on the gains gold had already made in the first quarter of 2025 and had factored in continued strong demand from both investors and central banks, averaging around 710 tonnes per quarter on a net basis that year.However, with the gold prices easing from their peak, what can be expected in the future?Gold prices may reach $3,800/oz in 9-12 monthsAccording to an analysis by Jigar Trivdi, Senior Research Analyst - Currencies & Commodities at Reliance Securities, COMEX gold appears poised for another leg of its bull run, with a possibility of the prices climbing as high as $3,800/oz in the next 9-12 months.Gold prices climbed above $3,220 per ounce as persistent concerns over the U.S. economic outlook and widening fiscal deficit continued to fuel demand for safe-haven assets.Further, Moody's downgraded the U.S. credit rating from 'Aaa' to 'Aa1' on Friday, citing rising debt levels and interest costs that are 'significantly higher than similarly rated sovereigns.''Fears of a potential recession and stagflation, coupled with ongoing global trade tensions, have further dampened sentiment around the U.S. economy. While there have been incremental improvements in the U.S.-China trade dynamics, the overall weakness could continue to pressure the U.S. dollar in the second half of the year, creating further upside for gold,' Trivedi noted.With this, he added that geopolitical risks remain elevated. The Russia-Ukraine conflict has seen renewed diplomatic movement, with President Donald Trump stating that Ukraine and Russia could begin immediate ceasefire negotiations, potentially without U.S. involvement, following a phone call with Russian President Vladimir Putin.'COMEX gold appears poised for another leg of its bull run, with a potential breakout above $3,500/oz. We do not rule out the possibility of prices reaching $3,800/oz over the next 9 to 12 months,' Trivedi said.In Indian terms, with the upcoming festival season and sustained domestic investment demand, he noted that gold prices could rise above Rs 1,10,000/10 gm and possibly even Rs 1,15,000/10 gm.Given this backdrop of heightened global uncertainty, central banks are likely to continue accumulating gold as part of their reserve diversification strategies. Simultaneously, investment demand- reflected in robust ETF flows - is expected to remain strong.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)