Gold Market Outlook Remains Positive Despite Short-Term Weakness

Brokers remain optimistic about gold’s long-term potential even as current prices face downward pressure from factors like rising bond yields, inflation worries, and a robust dollar.

While several banks have adjusted their short-term forecasts lower, pointing to decreased investor interest and heightened expectations of interest rate hikes, many analysts still anticipate a price recovery by 2026.

This past Sunday, JPMorgan adjusted its average gold price prediction for 2026, lowering it to $5,243 per ounce from a previous estimate of $5,708. The bank noted a significant drop in near-term demand, suggesting that investor interest is “driving to a trickle.”

“This calm is reflected in stagnant activity and demand metrics. COMEX gold futures gross open interest and volume remain weak, managed money futures net open interest stays low and stagnant, and ETF flows are weak,” analysts at JPMorgan expressed in a note released on Sunday.

This downgrade follows ANZ’s decision to cut its year-end gold price target to $5,600, attributing it to inflation expectations, rising yields, and a strong dollar impacting prices.

Nonetheless, JPMorgan holds onto a bullish perspective, projecting that prices could reach $6,000 an ounce by late 2026 as demand is expected to recover in the year’s second half.

“We maintain our bullish medium-term outlook and foresee stronger gold demand coming from investors and central banks into the latter half of 2026 once the significant uncertainties regarding energy and inflation have resolved,” they noted.

Since the onset of the US-Iran conflict on February 28, spot gold has dropped roughly 14%, driven by rising oil prices that have fueled inflation concerns alongside an increase in long-term interest rates from the Federal Reserve.