JPMorgan has lowered its outlook for gold prices, forecasting the precious metal to reach $4,500 per ounce by the fourth quarter of 2026, citing weaker-than-expected demand and the possibility of earlier U.S. interest rate increases.
The revised forecast, released in the bank's latest commodities outlook, marks a significant change from its June projection, when JPMorgan had anticipated gold could climb to $6,000 per ounce before the end of the year.
The bank now expects gold to average $4,300 per ounce during the third quarter before rising modestly to $4,500 in the final quarter.
Weaker Demand Prompts Forecast Revision
JPMorgan said demand from key sectors has not developed as strongly as previously expected, leading the bank to reassess its near-term outlook for bullion prices.
The bank also warned that the risks to its latest forecast remain weighted to the downside, particularly if the U.S. economy continues to show resilience over the coming months.
According to JPMorgan, stronger-than-expected economic data could encourage the Federal Reserve to raise interest rates earlier than markets currently anticipate.
Higher interest rates generally reduce the appeal of gold because the metal does not generate interest or dividend income, making fixed-income investments relatively more attractive.
Gold Holds Firm Despite Revised Outlook
Despite the downgrade, gold prices continued to trade higher on Friday.
Spot gold rose 1.3% to $4,174.21 per ounce, reaching its highest level since June 23. The precious metal has gained more than 2% this week, supported by continued investor demand amid global economic uncertainty and geopolitical risks.
Bank Retains Positive Long-Term View
Although JPMorgan has reduced its short-term expectations, it continues to maintain a constructive long-term outlook for gold.
The bank believes bullion prices could strengthen further in 2027, supported by sustained purchases from central banks and steady physical demand, which it expects to remain important drivers of the market over the longer term.
Outlook for Other Precious Metals
JPMorgan also updated its forecasts for other precious metals.
The bank expects silver to average between $60 and $65 per ounce over its forecast period as market conditions normalize.
Platinum is projected to average around $1,800 per ounce by the end of 2026, increasing to approximately $1,950 by the end of 2027, supported by supply constraints in South Africa.
For palladium, JPMorgan forecasts prices of $1,350 per ounce by the end of 2026, with an average of around $1,300 per ounce during 2027, reflecting broader weakness across the precious metals sector.
Market Watch
JPMorgan's revised forecast underscores the growing influence of U.S. monetary policy on commodity markets. While the bank continues to expect gold to remain well supported over the long term, it believes future price movements will largely depend on inflation trends, Federal Reserve policy decisions, and the pace of global investment demand.
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