JPMorgan predicts gold will soar to $4,000 amid economic turmoil
- Gold's price is rising significantly, recently hitting record highs above $3,500.
- Analysts predict continued strong investor demand, leading gold to potentially reach $4,000 by 2026.
- The ongoing risks of recession and stagflation, combined with central banks increasing their gold holdings, are driving this bullish forecast.
In the context of a turbulent economic landscape in the United States, particularly due to President Donald Trump's tariff policies, the demand for gold continues to rise significantly. Analysts at JPMorgan forecast that gold will reach $4,000 per ounce by the second quarter of 2026, driven by ongoing uncertainties surrounding trade policies, recession risks, and stagflation. This analysis indicates that gold's price rally may see an average of $3,675 per ounce in the upcoming year, as central banks and investors increase their gold holdings as a hedge against market volatility. As of April 2025, gold prices have surged approximately 29% since the beginning of the year, hitting record highs above $3,500. The structural bull run in gold is bolstered by continued elevated demand, which is expected to average around 710 tonnes quarterly through 2025. Central banks alone are projected to purchase about 900 tonnes of gold this year, reflecting their strategic shift to accumulate gold as a safeguard against potential economic downturns and geopolitical tensions. Investor behavior has also shifted in response to fears of a recession and unpredictability in U.S. Treasury yields, leading many to seek the relative safety of gold over other investments. As the prices of U.S. dollar-denominated securities decline, investors favor gold, which is not tethered to any currency and retains intrinsic value. Concurrently, increased Chinese retail interest is likely, especially in light of a potentially weaker Chinese Yuan, which can further stimulate demand for gold. Analysts maintain that the current economic outlook supports the idea that gold will continue to serve as a safe haven asset, particularly as central bank purchases further contribute to inventory pressures. The ongoing trade war and tariff-driven strategies employed by the current U.S. administration are set to keep gold in favor among investors, highlighting the precious metal's role in stabilizing portfolios amid economic uncertainties.