JPMorgan, a prominent bullion bull since the latter half of 2025, released research on Friday indicating a more cautious outlook for gold. The bank now expects physical gold and gold ETF demand in key sectors to be weaker than previously anticipated, which will likely cap this year's price gains.
The revised forecast projects gold reaching $4,300 per ounce in the third quarter and $4,500 per ounce in the fourth quarter. JPMorgan characterizes its updated view as maintaining a broadly bullish long-term trajectory but with sentiment turning notably cautious and risks skewed to the downside. The bank highlighted that its price targets face significant downside risks, particularly if hot economic data released over the remainder of the summer prompts the Federal Reserve's FOMC to announce interest rate hikes sooner than expected.
This marks a notable shift from just weeks prior. On June 9th, JPMorgan, then one of the most aggressive gold bulls, had projected prices could climb to $6,000 by year-end.
Spot gold prices extended recent gains on Friday, closing up approximately 1.2% at $4,170.30 per ounce after touching their highest level since June 23rd. The rally was fueled by Thursday's extremely weak non-farm payrolls data, which tempered market expectations for Fed rate hikes. Gold has gained over 2% for the week.
The downward revision from a $6,000 to a $4,500 year-end target signals a "moment of caution" for precious metals bulls. Periods of high interest rate expectations, like those seen in June, typically pressure non-yielding assets like gold as investors pivot toward fixed-income assets like U.S. Treasuries offering better returns.
Despite the near-term headwinds, Wall Street strategists remain broadly constructive on gold's longer-term prospects. They cite weak jobs data, expectations for a weaker dollar, falling U.S. Treasury yields, and the potential resumption of central bank buying as macro supports for the rebound from recent lows.
Major financial institutions including Goldman Sachs, Barclays, and TD Securities view the recent sharp gold sell-off more as a violent correction within a longer-term bull market cycle rather than its definitive end. They emphasize that gold hovering between $3,900 and $4,000 is likely very close to the bottom of this correction phase.
While adopting a more cautious short-to-medium-term investment stance, JPMorgan reiterated its long-term bullish view. The bank stated that gold could resume the strong upward momentum seen earlier in the year by 2027, driven by robust support from global central bank purchases and significantly stronger physical demand underpinned by persistent structural accumulation drivers.
Despite the current strong technical rebound from around $4,000 per ounce, JPMorgan's report clearly states that near-term price risks remain tilted downward. Should summer economic data outperform expectations and inflation prove stubbornly persistent, the Fed might be forced to hike rates earlier. This could push gold below $4,000, triggering technical selling and a potential drop toward the $3,500-$3,600 range.
JPMorgan's FX strategy team also noted that the specter of "U.S. exceptionalism" appears to be re-emerging. A key risk is that if AI is leveraged more broadly for geopolitical purposes, the growth divergence between the U.S. and other economies could widen further, driving a stronger dollar and imposing additional, sustained pressure on dollar-denominated gold.
The bank also provided forecasts for other precious metals. It expects silver prices to average $60 to $65 per ounce over its outlook period as commodity trading conditions normalize from last year's extreme tightness and the gold-to-silver ratio becomes less elevated. Supported by South African supply fundamentals, platinum is projected to average around $1,800 per ounce by end-2026, rising to about $1,950 per ounce by end-2027. Palladium is forecast at $1,350 per ounce by end-2026, with an average 2027 price of around $1,300, aligning with broader relative weakness expected across the precious metals complex in the short to medium term.
Is a $3,900 "Bottoming Moment" Setting the Stage for the Next Rally?
Christopher Wong, a senior precious metals strategist, noted that for gold bulls to regain a trading advantage, at least one of three factors needs to improve: lower real yields, a weaker dollar, or a clearer retreat in hawkish Fed expectations. Without these, any rally will likely face selling pressure from global institutional funds, and gold may consolidate below previous highs for an extended period.
In the view of Goldman Sachs and other Wall Street giants, the recent sharp decline in gold resembles a bear-market-like violent correction within a bull cycle, not the formal end of the long-term gold bull trajectory. The core pressure for the spot gold correction stemmed from the hawkish interest rate narrative combining "high inflation - rising rate hike expectations - strong dollar - rising real rates." This explains why gold's safe-haven attributes temporarily failed: in a scenario where energy shocks boost inflation and force a more hawkish Fed, the non-yielding asset is simultaneously pressured by rising real yields and a strengthening dollar.
Goldman Sachs lowered its end-2026 gold target from $5,400 to $4,900, as it no longer aggressively anticipates Fed rate cuts in 2026. However, it emphasized that global central bank gold purchases, averaging about 51 tonnes per month (triple pre-2022 levels), remain the strongest long-term bull market support, a logic that hasn't completely vanished.
The latest analysis from Bart Melek, a senior strategist at TD Securities, carries more immediate trading significance. He suggests gold may first break below $3,900 per ounce to complete the phase bottom of this bear-market-style adjustment, before rebounding above $5,300 in 2027. The logic is that short-term oil prices and inflation pressures are weighing on gold, but once post-Iran war inflation pressures ease, rates fall, and the dollar weakens, "currency debasement trades" and extremely strong buying led by central banks will re-dominate gold market sentiment.
Barclays maintains its bullish target prices of $4,791 for 2026 and $4,900 for 2027. The bank believes the current price around $4,150, near fair value, has improved the risk-reward ratio for investors considering re-entering the market. Barclays noted that the current gold adjustment is not surprising given the previously highly extended technical positioning and significant overreaction to relative macro factors, particularly real rates.
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