New Delhi: JP Morgan, a major player in global investment banking, has reiterated its positive outlook on gold, identifying it as the best hedge through 2025 and 2026 in light of increasing risks including stagflation, recession, currency devaluation, and uncertainties related to U. S. policies.
"The combination of stagflation, recession, currency devaluation, and U. S. policy risks in the markets makes gold one of the most effective hedges for investors in 2025 and 2026," remarked the report.
This analysis emphasized the robust momentum observed in gold prices during the first quarter of 2025, serving as a notable reflection of investor sentiment.
The report projects that the net demand for gold from both investors and central banks will average around 710 tonnes quarterly this year, significantly surpassing the 350-tonne minimum required to ensure price stability.
As per the findings, an increase of 100 tonnes in quarterly demand could lead to a price rise of 2 percent. Additionally, it anticipates that central banks will acquire roughly 900 tonnes of gold in 2025, with robust demand anticipated from investors, especially in the form of exchange-traded funds (ETFs) and from buyers in China.
"The current macroeconomic landscape is conducive to both sustained high levels of central bank purchases (with 900 tonnes expected in 2025) and a further growth in investor holdings, particularly from ETFs and Chinese investors," the report indicated.
JP Morgan indicated that rising tariffs imposed by the U. S. and heightened trade disputes with China are significant factors contributing to an increased risk of economic slowdown.
The bank identified indications of stagflation—where high inflation coincides with sluggish growth—as a factor bolstering the long-term optimistic trend for gold. According to their structural bull scenario, this suggests a continual increase in prices over an extended period.
The report has significantly enhanced its gold price forecast, predicting an average of USD 3,675 per ounce by the end of 2025, up from the current estimate of approximately USD 3,400. Furthermore, it projects that gold could potentially surpass USD 4,000 per ounce by the second quarter of 2026, bolstered by ongoing global economic tensions and increased risks of recession.
"Risks stemming from tariff-induced recession and stagflation are expected to further accelerate gold's structural bull market. We now anticipate gold prices averaging USD 3,675 per ounce by the fourth quarter of 2025, trending towards exceeding USD 4,000 per ounce by the second quarter of 2026," the report stated.
JP Morgan concluded that should demand exceed the current forecasts, gold prices might rise beyond expectations sooner than projected, solidifying its role as a dependable hedge amid escalating global uncertainties.
