JPMorgan Private Bank anticipates a significant rally in gold prices, potentially exceeding $US5000 per ounce next year. According to Alex Wolf, the firm’s global head of macro and fixed income strategy, prices could climb to between $US5200 and $US5300 by the end of 2026. This would represent an increase of over 25 per cent from current trading levels. The primary catalyst for this surge is expected to be sustained buying from central banks, particularly those in emerging-market economies.
Central bank acquisitions have significantly influenced gold’s robust performance in recent years, as policymakers pursue diversification and reliable stores of value. Gold reached record highs above $US4380 in October before a recent correction; however, the precious metal remains up more than 50 per cent this year. JPMorgan suggests that gold holdings as part of forex reserves remain relatively small for many central banks, particularly in emerging markets.
Wolf noted that even with moderating purchase volumes due to price increases, central banks are expected to continue adding to their gold reserves. Data from the World Gold Council shows that central banks added 634 tonnes of bullion to their reserves in the year through September. While this figure is lower than the corresponding periods of the previous three years, it remains substantially higher than the average before 2022.
China has largely driven these purchases, aiming to reduce reliance on US-centric financial markets. The World Gold Council forecasts full-year purchases for 2025 to range between 750 and 900 tonnes. Other countries, including Poland, Turkey, and Kazakhstan, have also contributed to the increasing demand for gold reserves.
