Analysis-Gold forecast to glitter again next year despite biggest gain since 1979

By Polina Devitt

LONDON, Dec 17 (Reuters) - Gold has made its biggest leap since the 1979 lipid situation successful 2025 -- with prices doubling successful the past 2 years -- a show which mightiness antecedently person meant forecasts of a large correction.

Yet a increasing capitalist excavation and factors ranging from U.S. argumentation to warfare successful Ukraine mean analysts astatine JP Morgan, Bank ​of America and consultancy Metals Focus present spot bullion hitting $5,000 per troy ounce successful 2026.

Spot golden prices reached a grounds $4,381 successful October, having ne'er deed $3,000 earlier March, driven by request from ‌central banks and investors with caller participants ranging from stablecoin issuer Tether to firm treasurers.

BofA strategist Michael Widmer said expectations of further gains oregon portfolio diversification are driving the buying, with impetus from U.S. fiscal deficits, efforts to constrictive the U.S. existent relationship shortage ‌and a anemic dollar policy.

Philip Newman, managing manager astatine Metals Focus, said further enactment stemmed from worries astir U.S. Federal Reserve independence, tariff disputes and geopolitics including warfare successful Ukraine and Russia's enactment with NATO countries successful Europe.

CENTRAL BANKS ANCHOR THE CYCLE

For a 5th twelvemonth running, cardinal slope diversification of reserves from dollar-denominated assets should springiness a instauration for golden successful 2026 arsenic they bargain erstwhile capitalist positioning is stretched, wealth rotates and prices fall, analysts said.

"The terms level is supported overmuch higher than wherever you started due to the fact that you get that cardinal slope request coming through," said Gregory Shearer, caput of basal and precious metals strategy astatine JP Morgan.

"And past each of a ⁠sudden we're sitting supra $4,000 successful a overmuch cleaner situation from a positioning ‌perspective, which past allows the rhythm to proceed going forward," helium said, referring to marketplace signals utilized by investors to commencement extending positions again aft de-risking.

JP Morgan analysts estimation that for prices to enactment flat, quarterly cardinal slope and concern request of astir 350 metric tons is needed. They forecast this buying to mean 585 ‍tons per 4th successful 2026.

Investor holdings of golden arsenic a stock of full assets nether absorption person risen to 2.8% from pre-2022 levels of 1.5%, JP Morgan's Shearer said, adding that portion elevated, this was not needfully a ceiling.

Morgan Stanley forecasts golden astatine $4,500 per ounce by mid-2026, portion JP Morgan expects mean prices astatine supra $4,600 successful Q2 and much than $5,000 successful Q4 and Metals Focus forecasts golden astatine $5,000 by end-2026.