JPMorgan Chase has revised down its average gold price forecast for 2026, cutting its projection to $5,243 per ounce from a previous estimate of $5,708, citing weaker investor demand and subdued activity in bullion markets.

In a note dated Sunday, analysts at the bank said investor interest in gold had “dried to a trickle,” pointing to low participation across COMEX gold futures, weak managed-money positioning, and muted exchange-traded fund (ETF) inflows.

The bank added that overall gold futures open interest and trading volumes have remained depressed in recent months, reflecting a broader slowdown in institutional participation in the precious metals market.

Despite the downgrade, JPMorgan Chase maintained a bullish long-term outlook for gold, keeping its year-end target at around $6,000 per ounce.

Analysts said they expect demand from both investors and central banks to strengthen in the second half of 2026 as volatility linked to energy prices and inflation begins to ease.

“We retain our bullish medium-term outlook and forecast that after the immense energy and inflation uncertainty clears, gold demand from investors and central banks will again re-intensify over 2H26,” the bank said.

Pressure from rates, dollar, and geopolitical tensions

The revised outlook comes as gold prices remain under pressure from rising US Treasury yields, a stronger US dollar, and persistent inflation concerns linked to ongoing geopolitical tensions involving the United States and Iran.

Spot gold prices have fallen roughly 14% since the escalation of the conflict in late February, as higher oil prices have fueled expectations that the US Federal Reserve may maintain elevated interest rates for longer than previously anticipated.

Earlier this week, gold also hit its lowest level since March 30 amid a broader selloff in global bond markets driven by inflation fears and shifting expectations around monetary policy.

Other banks also revise forecasts

Other financial institutions have also adjusted their outlooks. Australia and New Zealand Banking Group (ANZ) recently lowered its year-end gold target to $5,600 per ounce, citing rising yields, persistent inflation expectations, and continued US dollar strength.

Outlook remains split

While near-term sentiment remains cautious due to macroeconomic pressures, major banks including JPMorgan still expect a potential rebound in gold prices later in 2026, driven by renewed central bank purchases and recovering investor demand once global inflation and energy market volatility stabilise. (ILKHA)