Gold prices seemed to be mounting a comeback, but JPMorgan just made the rally harder to trust.
Investors expected the shiny yellow metal to continue pushing higher into year’s end, buoyed by rate-cut hopes, central-bank buying, and safe-haven demand.
Reuters reported that spot gold was up over 2% for the week, even as JPMorgan recently expected a much stronger year-end finish back in June.
Now, the bank sees things differently.
The bank said demand from key gold-buying sectors may not be as strong as it had expected, warning that risks now lean to the downside if hot U.S. data forces the Federal Reserve back toward rate hikes.
Interestingly, Goldman Sachs, by contrast, still sees sovereign demand and emerging-market central-bank diversification keeping the long-term bull case alive, even after trimming its target.
Nevertheless, JPMorgan’s new call raises the sharper question for investors: Is the rebound durable or already capped?
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What JPMorgan changed in its gold forecast
JPMorgan has just reset its gold price target in a big way.
As recently as June 9, according to Reuters, the bank expected gold to continue climbing into the year’s end.
Now, the bank sees gold reaching $4,300/oz in the third quarter and $4,500/oz in the fourth quarter, a path that is remarkably cautious compared with what investors had been working with.
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The big reason was demand.
JPMorgan said buying from key sectors wouldn’t be as strong as it expected, limiting how far gold could run in the near term.
The gold trade leaned heavily on central-bank demand, physical buying, and expectations that the Federal Reserve would eventually ease policy.
Now that risk has shifted, according to the bank’s analysts.
It says the risks to its forecast “skew to the downside” if hot U.S. data revives the possibility of earlier Fed rate hikes.
It’s important to note that JPMorgan isn’t abandoning the long-term bull case. It still sees support from central-bank buying and physical demand in 2027.
Nevertheless, the near-term message is clear: gold bulls just lost one of Wall Street’s more aggressive year-end road maps.
Where Wall Street sees gold prices heading
- Goldman Sachs: $4,900/oz by end-2026. Goldman’s team identified robust sovereign demand and emerging-market central bank diversification in narrowing down their price target.
- Bank of America: $4,800/oz by Q4 2026. BofA cut its near-term outlook as investor demand slowed and Fed-related headwinds intensified.
- Morgan Stanley: $5,200/oz in H2 2026. Morgan Stanley argued that gold needs stronger ETF inflows to make that target much more realistic.
- UBS: $5,200/oz over the next 12 months.UBS feels gold could rebound as markets rethink Fed policy, dollar pressure, and central bank buying.
- Deutsche Bank: $4,800/oz by Q4 2026. Deutsche Bank cut its second-half gold view, seeing $4,300/oz in Q3 before a rebound to $4,800/oz in Q4, as Fed repricing and resilient U.S. macro data pressure investor demand.
Sources: Reuters, Kitco News, Business Insider, Investing.com, JPMorgan Global Research, and Kitco-cited notes from Morgan Stanley and Bank of America.
Why Fed risk is back in the gold debate
Fed risk is back on the table, as it has moved from debating cuts to whether it may have to hike again.
That shift began at the June 17 Fed meeting.
The central bank kept rates in the 3.50%-3.75% range, but Reuters reported that 9 of 19 policymakers now see a rate hike this year, up from 0 in March. Six of those nine saw more than one quarter-point hike.
Higher rates raise the opportunity cost of holding gold that pays no yield.
Moreover, the inflation data gave the hawks cover. Reuters reported that the Fed’s preferred PCE price index rose 4.1% year over year in May, the first reading above 4% in three years, while the core PCE (excluding food and energy) rose 3.4%. Economists said the data kept a 2026 rate hike on the table.
Consequently, the big banks have moved fast.
BofA said it expected 3 rate hikes totaling 75 bps in 2026, with increases in September, October, and December. Reuters reported that Deutsche Bank also projected 2 hikes this year, in September and December.
The jobs report complicated that view.
June payrolls rose only 57,000, below the 110,000 expected, and April-May payrolls were revised lower by 74,000. That helped gold prices rebound as traders cut September hike odds to about 54%, down from 66% before the data, according to CME FedWatch, cited by TheStar.
Federal Reserve Chair Kevin Warsh added another layer.
He said inflation risks and expectations had eased in recent weeks, but he also repeated the Fed’s commitment to its 2% target.
That leaves investors watching the next CPI, PCE, wages, oil prices, and Fed language. Gold can rally if odds of a hike fade, but JPMorgan warns that one hot data run could quickly cap the move again.
Related: Goldman Sachs delivers honest verdict on gold’s selloff
