Expectations of a new record in gold prices: Long-term forecast increased

JP Morgan, one of the leading investment firms in the U.S., reviewed its long-term expectations for gold in its latest report published today. The report stated that gold could reach $4,500 per ounce in the long term. Despite this revision, the price forecast for the end of 2026 was kept at the $6,300 level, as previously announced.

In the bank's assessment, it was stated that the continued intensive gold purchases by central banks, the decline in interest in U.S. Treasury bonds, and the shift by some countries from the dollar to the Chinese yuan in their reserve currency preferences were influential. It was noted that these developments are paving the way for a potential paradigm shift in the global reserve currency and are increasing investors' portfolio diversification.

The report also emphasized that long-term pricing approaches used for other commodities are not equally applicable to gold. The bank argued that supply and demand balances function differently in the gold market, and therefore, incentive pricing or marginal cost analyses offer limited foresight.

Over the past year, geopolitical uncertainties, the U.S. Federal Reserve's entry into an interest rate cut cycle, the acceleration of central bank purchases, and the increase in interest in gold-backed exchange-traded funds have laid the groundwork for the precious metal to frequently refresh its records.