JP Morgan has projected that gold prices will climb above the $4,000 per ounce mark next year, citing increasing probabilities of a recession fueled by heightened US tariffs and the ongoing trade dispute between the US and China.
The bank revised its gold price forecast, anticipating an average of $3,675 per ounce by the fourth quarter of this year, en route to exceeding $4,000 per ounce by the second quarter of 2026. The bank also noted that the risks to this forecast lean towards an earlier surge if demand outpaces their current expectations.
According to JP Morgan, "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."
Spot gold, which has already seen a 29% increase and reached 28 record highs this year, touched the $3,500 per ounce milestone for the first time on Tuesday. Earlier in April, Goldman Sachs also increased its end-2025 gold price forecast to $3,700 per ounce from $3,300, suggesting that in "extreme tail scenarios," gold could potentially trade near $4,500 per ounce by the end of 2025.
However, JP Morgan identified an unexpected decline in central bank demand as the primary fundamental risk that could negatively impact gold prices. Analysts at the bank further explained that a scenario where the US economy demonstrates significant resilience to tariffs, allowing the Federal Reserve to aggressively combat inflation and prompting markets to anticipate rate hikes, would also be materially bearish for gold.
In contrast to its bullish outlook on gold, JP Morgan anticipates near-term headwinds for silver due to uncertainty surrounding industrial demand. Nevertheless, they foresee a "catch-up window" opening in the latter half of 2025, with silver prices expected to rise towards $39 per ounce by the end of that year.
Meanwhile, ANZ also revised its gold price forecasts, raising its year-end target to $3,600 per ounce and its six-month forecast to $3,500, up from the previous $3,200. ANZ stated: "Increasing risks of a deeper recession, another turn in the geopolitical landscape, disruptions in global supply chains, fears of rising inflation along with a changing rate outlook suggest that gold will remain on strong footing in the foreseeable future."
ANZ analysts cautioned, however, that "a de-escalation in the U.S.-China tariff war, a quicker resolution of trade concerns with U.S. trading partners could soften downside risks to the U.S. growth outlook and weigh on gold prices." They also noted that if the Federal Reserve maintains interest rates against current market expectations of three to four rate cuts, it would present another obstacle for gold prices.
Separately, spot gold experienced a gain of over 2% on Wednesday, breaking through the $3,300 per ounce mark for the first time in history and reaching another record high as trade war uncertainties and tariff concerns continued to bolster demand for the safe-haven asset.
Philip Carter for Rough&Polished from London
