JP MORGAN CHASE(US:JPM) Sou Hu Cai Jing·2025-12-23 03:29Core Viewpoint - Gold prices experienced a significant increase in 2025, with a peak rise of 55%, surpassing $4000 per ounce in October, driven by trade uncertainties, declining dollar demand, and central banks increasing gold reserves. The long-term outlook for gold prices remains positive, with expectations to reach $5000 per ounce by the end of 2026 and $5400 per ounce by the end of 2027 [1]. Price Forecast Overview - JPMorgan's quarterly gold price predictions for 2026 are as follows: - Q1: approximately $4400 per ounce - Q2: approximately $4655 per ounce - Q3: approximately $4860 per ounce - Q4: approximately $5055 per ounce [2]. Drivers of Gold Price Increase - The demand for gold is influenced by multiple factors, including a weaker dollar, declining U.S. interest rates, economic and geopolitical uncertainties, and its role as a hedge against currency depreciation and inflation. Gold is viewed as an "insurance asset" during market downturns or geopolitical conflicts [2]. - In Q3 2025, total gold demand from investors (ETFs, futures, bullion, and coins) and central banks reached approximately 980 tons, exceeding the average of the previous four quarters by over 50% [2]. Major Buyers of Gold in 2026 - The core of JPMorgan's price forecast relies on sustained strong demand from central banks and investors, with an expected average quarterly demand of about 585 tons [3]. Demand Structure for 2026 - The projected quarterly demand structure for 2026 is as follows: - Central Banks: approximately 190 tons - Bullion and Coins: approximately 330 tons - ETFs and Futures: approximately 275 tons for the year, primarily concentrated in the early part of the year [5]. Central Bank Gold Purchases - Central banks are expected to continue their structural trend of increasing gold purchases, with an estimated total of 755 tons in 2026, significantly above the long-term average of 400-500 tons prior to 2022 [5]. Investor Demand for Gold - Investors are also increasing their allocation to gold, with expectations of net inflows into gold ETFs of approximately 250 tons and demand for bullion and coins exceeding 1200 tons in 2026 [9]. Gold's Share in Asset Management - As of September 2025, gold held by investors through ETFs, physical gold, and COMEX futures accounted for about 2.8% of the total assets under management (AUM) in global stocks, bonds (excluding central bank reserves), and alternative assets. This share has increased by about 1 percentage point over the past two years, with potential to rise to 4%-5% in the coming years [10][12]. Upward Price Risks - The upward price risks for gold remain dominant, as long as central banks and investors continue diversifying their assets. A mere 0.5% shift of overseas U.S. assets into gold could push prices to $6000 per ounce, given the relatively inelastic supply [12].