Yeliz Akmaca 
JP Morgan expects gold prices to reach an average of $5,055 per ounce by the fourth quarter of 2026, fueled by strong investor demand and steady central bank purchases. The bank anticipates quarterly gold buying to average 566 tonnes next year.
Analysts stated, “Gold has been our highest-conviction long all year, and we believe it still has more room to rise as we enter the Fed’s rate-cutting cycle.” This outlook aligns with gold’s strong performance in 2025 amid interest rate cut expectations.
Recent Gold Movements and Investor Behavior
Gold has surged in 2025 due to interest rate cut expectations, geopolitical risks, and central bank diversification away from the U.S. dollar. After reaching a record $4,381 per ounce, gold has retreated to $4,066.
JP Morgan strategists attribute the recent decline not to retail investors exiting gold ETFs, but to trend-following commodity trading advisors taking profits on gold futures.
They note that in 2023 and most of 2024, retail investors turned to bonds to hedge rising equity prices. However, in 2025, this trend has not continued, with gold becoming the preferred hedge alongside equities.
Gold Investment Outlook
JP Morgan strategists predict that stock prices will continue rising over the next three years, with equity allocations reaching 54.6%, the peak seen during the dot-com bubble. At the same time, bond and cash positions are projected to increase by $7 trillion annually.
Using ETFs as a proxy, analysts calculate that global nonbank investors could increase their gold allocation from 2.6% to 4.6%, implying that gold prices could nearly double by 2028 if these projections hold.
Gold as a Portfolio Diversifier
Gold is not only a store of value but also a strong portfolio diversifier against equity risk. JP Morgan emphasizes that long-term capital allocators, including sovereign wealth funds, central banks, and asset managers, are likely to increase gold exposure.
Key Points:
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Expected quarterly gold purchases: 566 tonnes
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Q4 2026 gold forecast: $5,055 per ounce
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Equity allocations may reach 54.6%
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Annual increase in bonds and cash: $7 trillion
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