Key takeaways
- Gold prices have surged in 2025, with President Trump’s focus on tariffs pushing the metal to fresh highs.
- Longer term, the 2025 and 2026 outlook for the metal remains bullish. Prices are expected to average $3,675/oz by the fourth quarter of 2025 and climb toward $4,000 by mid-2026.
- Central bank and investor demand for gold is set to remain strong, averaging around 710 tonnes a quarter this year.
Will gold prices continue to hit all-time highs in 2025?
Gold prices have rallied significantly this year, climbing as much as 30% year-to-date when they peaked at $3,500/oz in April, surpassing J.P. Morgan Research’s previous forecasts.
As markets weigh policy uncertainty and geopolitical risks, what is the outlook for gold prices in 2025 and beyond?
“Earlier this year, we examined the structural shift in gold’s demand and geopolitically influenced pricing drivers fueling its rebasing higher, ultimately posing the question if $4,000/oz is in the cards,” said Natasha Kaneva, head of Global Commodities Strategy at J.P. Morgan.
“To answer the question — yes, we think it is, particularly now with recession probabilities and ongoing trade and tariff risks. We remain deeply convinced of a continued structural bull case for gold and raise our price targets accordingly,” Kaneva added.
J.P. Morgan Research now expects prices to average $3,675/oz by the final quarter of 2025, rising toward $4,000/oz by the second quarter of 2026.
Gold price forecasts
Gold prices are expected to average $3,675/oz by the fourth quarter of 2025.
The precious metal surpassed multiple record peaks in 2024 and broke through the $2,900/oz barrier for the first time in February this year, as investors navigated market volatility following U.S. tariffs and heightened geopolitical risks. Prices peaked at $3,500/oz in April against a backdrop of unpredictable U.S. trade policy.
Traditionally, a weaker U.S. dollar and lower U.S. interest rates increase the appeal of non-yielding bullion. Economic and geopolitical uncertainty also tend to be positive drivers for gold, due to its safe-haven status and ability to remain a reliable store of value. It has low correlation with other asset classes, so can act as insurance during falling markets and times of geopolitical stress.
But given gold’s diverse and fluid drivers of demand at the moment, the metal has recently served both as a debasement hedge — or a form of protection against the loss of a currency’s purchasing power due to inflation or currency debasement — and in its more traditional role as a non-yielding competitor to U.S. Treasuries and money market funds.
“We still think risks are skewed toward an earlier overshoot of our forecasts if demand continues to surprise our expectations. For investors, we think gold remains one of the most optimal hedges for the unique combination of stagflation, recession, debasement and U.S. policy risks facing markets in 2025 and 2026,” said Gregory Shearer, head of Base and Precious Metals Strategy at J.P. Morgan.
Who will be the main buyers of gold in 2025?
Following gold’s significant 30% rally, some investors have questioned who the major buyers of gold will be in 2025, with prices at current levels.
Underpinning the J.P. Morgan Research forecast for gold prices is continued strong investor and central bank (CB) gold demand, which is projected to average around 710 tonnes a quarter on net this year.
Central banks:
Consistently high levels of purchases by CBs (900 tonnes forecasted in 2025) are expected, given the current macro environment as well as a further expansion in investor holdings, particularly from exchange-traded funds (ETFs) and China.
Even with three consecutive years of more than 1,000 tonnes of CB gold purchases, the structural trend of higher CB buying has further to run in 2025 and 2026, according to J.P. Morgan Research.
Diversification away from U.S. dollar (USD) reserve holdings, while still moderate, has been accelerating in recent years, according to the latest Currency Composition of Official Foreign Exchange Reserves (COFER) data from the International Monetary Foundation (IMF). While USD share increased modestly in the fourth quarter of 2024, it still ended the year at around 57.8%, marking a 0.62 percentage point decline.
“Add in economic, trade and U.S. policy uncertainty and shifting, more unpredictable geopolitical alliances and we think further diversification into gold will amount to around 900 tonnes of CB buying in 2025,” Shearer said.
Globally, CB gold holdings amount to nearly 36,200 tonnes and account for almost 20% of official reserves, up from around 15% at the end of 2023, according to reported IMF data through the end of 2024.
The U.S., Germany, France and Italy still hold around 16,400 tonnes of gold combined. This represents nearly half of reported global official gold reserves, with the U.S. holding almost a quarter of global reported gold reserves alone. Each of these four countries hold more than 70% of its total reserves in gold. Taking out these four outsized holders, gold’s share in official reserves falls to just above 11%.
Gold as a percentage of total reserve holdings across select central banks
Central banks remain strong buyers of gold, led by the U.S., which has 74% of its total holdings in gold.
In 2024, the main reported purchasers of gold — buying 20 tonnes or more — were Poland, Türkiye, India, Azerbaijan (SOFAZ), China, Czechia and Iraq.
“Central banks aren’t done with gold yet, with added political uncertainty likely helping to stoke a continued revival in 2025,” Shearer said.
Investors:
CBs haven’t been the only ones increasing their relative share of gold holdings over the last couple of years.
In the financial gold markets, investors’ futures positioning remains long, or with an expectation the price will rise in value in the future. Non-commercial futures and option long positions in COMEX gold — the primary futures and options market for trading metals — reached a new high in 2024 in real terms.
While it is the quickest component from a flows perspective, futures positioning is only one, relatively small, part of broader gold investor holdings, which also include gold ETFs and physical bar and coin holdings.
Combined bar and coin holdings, ETFs and net non-commercial futures length in COMEX gold rose by 3% year-on-year in 2024 to around 49,400 tonnes. This is dominated by around 45,400 tonnes held as bars and coins by private investors, according to World Gold Council data.
“Central Banks aren’t done with gold yet, with added political uncertainty likely helping to stoke a continued revival in 2025.”
Gregory Shearer
Head of Base and Precious Metals Strategy, J.P. Morgan
With the price rally last year, the notional value of this holding increased by 31% year-on-year to around $4.2 trillion.
“This put investor gold allocation back on par with levels last seen in 2010/11, and the notional value of this investor holding rose even more to $5 trillion by the end of last quarter,” Shearer noted.
ETF inflows have sharply gained momentum, with year-to-date total inflows amounting to 310 tonnes — translating to around 10% in total global holdings. This has been fueled largely by a 9.5% increase in U.S. holdings and a 70% increase in Chinese ETF holdings.
Historically, ETF holdings are driven primarily by changes in interest rates, as lower rates increase the attractiveness of non-yielding gold as a risk-free asset.
“We think gold’s safe-haven hedging benefits will continue to stoke additional ETF demand outside of the traditional driver of falling real yields, particularly as focus has turned aggressively toward hedging the combination of inflation and growth risks,” Shearer added.
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