Despite a recent significant sell-off in gold, several major banks, including J.P. Morgan, have not wavered in their optimistic outlook for the precious metal. J.P. Morgan stated on Monday that, driven by central bank and investor demand, gold prices are expected to rise to $6,300 per ounce by year-end, asserting that the long-term investment thesis for gold remains robust. Analysts at J.P. Morgan wrote in a report: "Although the impact of last week's sell-off has not completely dissipated, it has not shaken our structural bullish view on gold. This long-term rally in gold is not, and will not be, linear, so we are once again entering a phase of digestion, reset, and continuation." The bank believes that exceptionally strong demand from both investors and central banks will support gold prices, forecasting quarterly average demand to exceed 700 metric tons and predicting that prices could advance towards $6,600 per ounce by 2027. J.P. Morgan analysts wrote: "Our analysis shows that although the room for further upside is becoming narrower as prices climb, we are still quite far from a stage where the structural gold rally collapses under its own weight."
In contrast, J.P. Morgan holds a more cautious stance on silver, suggesting that the risk of the gold-to-silver ratio moving higher persists in the coming weeks, as central banks are not structural buyers on dips in the silver market as they are in gold.
Besides J.P. Morgan, Bank of America is also bullish on gold's prospects. A team led by Michael Hartnett, Chief Investment Strategist at Bank of America, published a report stating that short-term volatility does not change the long-term logic. The macro drivers fueling the rise in gold and physical assets remain solid, and unless a "mega-negative narrative" more destructive than the current macro story emerges, this gold bull market—driven by the US's massive debt system and currency debasement—will not easily conclude. Strategists including Hartnett noted that the US dollar has effectively depreciated by 12% since President Trump took office. Hartnett pointed out that a weaker dollar is a key measure to revitalize manufacturing in swing states of the "Rust Belt" type, such as Pennsylvania, Michigan, and Wisconsin. This is not just an economic calculation but a necessary option for Trump's political survival. Data clearly shows a strong negative correlation between Trump's approval ratings and the dollar's performance during his term—meaning a weaker dollar correlates with more stable support. Therefore, Hartnett's team at BofA continues to believe gold could challenge $6,000 by 2026.
Additionally, Giovanni Staunovo, an analyst at UBS, said he expects gold prices to reach new record highs above $6,200 per ounce later this year. Deutsche Bank reaffirmed its gold price forecast of $6,000 for this year, citing persistently strong investor demand.
However, not all Wall Street firms are equally optimistic. Citi maintains a supportive view on gold in the short term (0-3 months), with a target price of $5,400-$5,600 per ounce, citing persistently high geopolitical and economic risks. But for the second half of 2026, Citi's stance turns distinctly "cautious." The bank stated that while short-term price spikes are still possible, gold's valuation has reached "extreme levels." As safe-haven sentiment collectively recedes in the second half of 2026, the "pillars" supporting gold prices could face structural collapse. Citi expects a series of risk factors underpinning current high gold prices to diminish later this year. Specifically, these include: 1) Geopolitical De-escalation: Citi's base case anticipates a form of agreement in the Russia-Ukraine conflict before the summer of 2026, alongside a de-escalation in tensions with Iran. The mitigation of these two major risks would significantly weaken investors' hedging motives. 2) US Economic "Goldilocks": The Trump administration, during the 2026 mid-term election year, could push the US economy into a "Goldilocks" state (high growth, low inflation), which would diminish portfolio hedging demand for gold. 3) Fed Independence: Despite political pressure, Citi expects the Federal Reserve to maintain its independence, which is also a medium-term headwind for gold prices. The confirmation of Kevin Warsh as the next Fed Chair would reinforce market confidence in the independence of monetary policy.
Overall, based on the current market consensus, gold remains in a period of wide fluctuations in the short term, with buying sentiment偏向谨慎, but as global competition reaches a critical juncture, the long-term allocation demand for gold assets from global central banks and the foundational support provided by central bank funds will continue to act as the "ballast" for the gold bull market.
Gold price volatility surpassed that of Bitcoin last Friday, with spot gold falling over 9% and spot silver plummeting nearly 27%. Market participants indicated that the sharp decline in gold and silver prices was initially triggered by news of Kevin Warsh's nomination for Fed Chair but accelerated noticeably during afternoon trading hours ET on Friday. Funds that had previously flooded into the precious metals market began taking concentrated profits, coupled with a rapid rise in the US dollar index, which sharply increased the cost of dollar-denominated gold and silver for overseas investors. Furthermore, Warsh's potential appointment was seen as conducive to stabilizing the dollar, shaking the trading logic of "precious metals replacing the dollar as the global reserve asset." Data showed the dollar index rose about 0.8% at one point on Friday, significantly pressuring precious metals. On the trading front, forced liquidations and leverage reduction were considered important factors amplifying the decline. When gold and silver prices plummeted, margin calls triggered a chain reaction, forcing investors to sell passively, leading to a stampede-like downturn.
Several asset managers believe this round of gold decline is not purely due to weakening fundamentals but更像是对“集中度风险”的重新评估. Katie Stofs, an Investment Manager at Mattioli Woods, pointed out that just as AI and tech stocks experienced剧烈波动 due to high crowding, gold也同样承载了过多资金与叙事. When everyone is on the same side, even quality assets cannot avoid剧烈抛售 during deleveraging. Some institutions believe the process of gold rushing towards the $5,000 mark was too smooth, lacking necessary corrections and turnover. Dan Meadows, Investment Director at BRI Wealth Management, noted that the sustained weakness of the dollar previously provided important support for gold prices, but the dollar has recently shown signs of stabilization. Meanwhile, although central bank buying remains an important pillar for gold in the medium to long term, this force has cooled somewhat in recent months.
It is worth mentioning that the CME Group raised margin requirements for precious metals futures, an adjustment effective after Monday's close. Zain Vawda, an analyst at MarketPulse, part of OANDA, said: "The increase in margin requirements reduces the attractiveness of holding speculative positions and will also force a large number of retail investors lacking additional liquidity to close their positions and exit the market."
According to the latest data compiled by institutions, gold's "30-day realized volatility measure" has surged to over 44%, hitting its highest level since the 2008 global financial crisis and exceeding Bitcoin's volatility measure of approximately 39%. This反常且极端的现象标志着一种重大逆转, as gold is typically seen as a much more stable store of value than cryptocurrencies, which are renowned globally for being highly susceptible to speculative forces. Since Bitcoin's重磅问世 17 years ago, gold's volatility measure has only surpassed Bitcoin's on two occasions excluding this recent instance; the most recent occurrence was in May of last year, when Trump's global tariff threats triggered持续紧张的贸易紧张局势, leading the market to "sell everything that could be sold"—a broad decline in prices across all tradable assets in financial markets.
Economic uncertainty, geopolitical tensions, and persistent sovereign debt pressures have driven precious metals prices to continuously hit record highs recently, even surprising experienced market participants. The already hot rally accelerated further at the start of the year, with retail investors and some speculative forces pouring into the gold market due to concerns over geopolitical risks, currency debasement, and the independence of Fed monetary policy. The surge in volatility occurred after gold experienced one of its largest declines in decades,延续了一个剧烈的反转; some commodity traders still say gold's rally since the start of the year has been too fast and too fierce. On Monday, gold prices fell as much as 10%, dropping to around $4,400 per ounce during Asian trading hours. At the time of writing, spot gold had risen over 3%, reclaiming the $4,800 per ounce level.
What factors will influence future gold price movements? Institutions generally believe that the strength of the US dollar and global interest rate expectations will directly impact dollar-denominated gold. Additionally, the following major factors will dominate gold's future direction.
First is the sustainability and stability of central bank gold purchases. Anshul Sehgal, Global Co-Head of Fixed Income, Currencies, and Commodities (FICC) in Goldman Sachs' Global Banking & Markets division, believes the asset allocation shift by global central banks from dollars to precious metals is a primary driver. The CIO of UBS Global Wealth Management noted that the Polish central bank's move to raise its gold holding target is noteworthy; if more central banks follow suit, it would indicate reduced sensitivity to price volatility and could sustain high purchase volumes.
Second is the macroeconomic and policy environment. The UBS GWM CIO mentioned that concerns about Fed independence and policy uncertainty are both favorable for gold. A pause in the Fed's easing cycle is a major downside risk for gold prices, while a trend decline in yields would be supportive.
Third is geopolitics and safe-haven demand. Investor concerns about geopolitical risks, such as the situation with Iran, have fueled gold's rise, with safe-haven and portfolio diversification needs being key drivers. UBS also lists geopolitical tensions as a key factor that could push gold prices closer to its upside scenario.
Fourth is investment demand and market sentiment. The World Gold Council's full-year "Gold Demand Trends Report" for 2025, released on January 29, stated that global gold demand reached a record high of 5,002 tonnes in 2025; the total value of annual gold demand reached $555 billion. Investment demand grew to a milestone level of 2,175 tonnes, becoming the main driver pushing total annual gold demand to a new historical record. Global gold ETFs saw net inflows of 801 tonnes for the full year, the second-strongest year on record. The UBS GWM CIO pointed out that the record high gold demand in 2025 was primarily driven by investment demand (including ETF inflows and bar/coin purchases), not solely by central bank buying.
Comments