2025 proved to be a landmark year for the precious metals market. Gold prices surged by as much as 55%, breaking the $4,000/oz barrier for the first time in October. This historic rebasing was driven by a perfect storm of trade concerns, a softening U.S. dollar, and aggressive accumulation by central banks.

As investors look toward 2026, data from J.P. Morgan Global Research suggests the bull market has further to run.

The Forecast: $5,000 and Beyond

Despite the explosive growth seen over the last year, J.P. Morgan analysts believe the trends fueling gold’s rise are not yet exhausted.

Consequently, J.P. Morgan forecasts gold prices will average $5,055/oz by the fourth quarter of 2026, with the potential to rise toward $5,400/oz by the end of 2027.

Key Drivers: A Shift in Market Dynamics

While gold traditionally benefits from lower U.S. interest rates and a weaker dollar, its role has evolved. It is currently serving a dual purpose: acting as a standard non-yielding competitor to Treasuries, but also as a critical hedge against currency debasement and inflation.

This dual utility has sparked a massive inflow of capital. Gregory Shearer, head of Base and Precious Metals Strategy at J.P. Morgan, points out that combined demand from central banks and investors (via ETFs, futures, bars, and coins) reached approximately 980 tonnes in the third quarter of 2025 alone. This represents a 50% increase in volume and a nearly 90% increase in notional value compared to previous averages.

Who Will Buy Gold in 2026?

J.P. Morgan projects that strong demand will persist, underpinning their bullish price targets. Their forecasting model relies on a “rule of thumb” regarding supply and demand dynamics: generally, quarterly net demand from investors and central banks must exceed 350 tonnes to drive prices higher.

For 2026, the firm projects average quarterly demand will sit comfortably around 585 tonnes, comprising:

• 330 tonnes in bar and coin demand.
• 190 tonnes from central banks.
• Significant front-loaded demand from ETFs and futures.

The Evolution of Central Bank Buying

While central banks have purchased over 1,000 tonnes annually for the past three years, 2026 volume is expected to moderate slightly to around 755 tonnes. With gold prices now exceeding $4,000/oz, central banks require fewer physical tonnes to achieve their desired financial allocation percentages. Despite the lower tonnage forecast, buying activity remains historically elevated compared to pre-2022 levels, signaling continued institutional confidence in the metal.