Central bank buying ignites gold prices, JPMorgan forecasts $4,500

⑴ JPMorgan on Wednesday raised its long-term gold forecast to $4,500 per ounce, while maintaining its end-2026 target at $6,300. The bank stated that increased central bank buying, the public announcement of U.S. Treasury divestment, and countries shifting their income base from the U.S. dollar to the renminbi have prompted it to place greater emphasis on the “reserve currency paradigm shift” and “significant investor diversification.” ⑵ Spot gold has risen about 20% this year, hitting a three-week high of $5,248.89 on Tuesday, but still below the all-time peak of $5,594.82 set on January 29. Previously, in 2025, gold surged by more than 64%. The bank pointed out that, due to the unique supply and demand dynamics of gold compared to other commodities, many long-term pricing tools used for industrial goods, such as incentive pricing and marginal cost analysis, may be less applicable. ⑶ Geopolitical risks, the Federal Reserve's accommodative interest rate cycle, central bank buying, and gold ETF inflows have jointly driven gold prices to repeatedly hit new highs over the past year. The low interest rate environment is favorable for non-yielding gold.