Gold’s scorching rally is likely to take prices above the $5,000 an ounce mark next year, driven mainly by buying from central banks in emerging-market economies, according to JP Morgan Private Bank.
Prices could reach $5,200 to $5,300 by the end of 2026, Alex Wolf, the firm’s global head of macro and fixed income strategy, said in an interview. That would be more than 25% higher than where the metal is currently trading.
Purchases from central banks have been a key driver in bullion’s ferocious run over the past couple years as policy makers sought a store of value and asset diversification. Prices reached record highs above $4,380 in October before pulling back in recent weeks. The precious metal is still up more than 50% this year.
Gold as part of “forex reserves is still relatively small as an overall percentage” for many central banks, especially in emerging markets, Wolf said. “We still see them adding” even though the pace of buying may moderate because of the gains in prices, he said.
Central banks added 634 tons of bullion to their reserves in the year through September, according to data from the World Gold Council. While that was below the equivalent period in each of the last three years, it was still comfortably above the pre-2022 average. The WGC forecast full-year purchases for 2025 within a range of 750 to 900 tons.
The purchases have been largely led by China, with its goal of building a world less dependent on US-centric financial markets. Poland, Turkey and Kazakhstan have also been adding to their gold reserves.
Many emerging markets economies are running budget surpluses, with large cash flows that need “to be reinvested,” according to Wolf. “A lot of it will still go to dollars. So we’re not even really looking at gold as replacing dollars. It’s just an increasing share will go to gold.”
The firm’s forecast is among the most bullish gold calls on Wall Street, including after the precious metal saw setbacks in recent weeks. Prices are down about 6% since reaching an all-time high on Oct. 29.
Still, many banks have remained positive on the outlook for the haven asset, with Goldman Sachs Group Inc. expecting gold to reach $4,900 by the final quarter of 2026.
Wolf also sees other bullish drivers, including investors increasing their gold holdings and continued concerns over fiat currencies.
The share of gold in investor portfolios “is still relatively small,” he said. “Even if you get a higher share of investors to add just up to 5% in gold, that still presents further demand and likely further upside.” (By Yvonne Yue Li)
