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Key Points

JP Morgan reaffirms gold as the top hedge against stagflation and recession risks through 2026. The bank expects prices to surge past $4,000/oz by mid-2026 due to strong demand from central banks and investors. Rising US-China trade tensions and policy uncertainties are key drivers behind the bullish outlook. If demand exceeds projections, gold could outperform expectations sooner than predicted.

Key Points: JP Morgan Says Gold Best Hedge for 2025-2026 Stagflation Risks

  • Gold demand to average 710 tonnes per quarter in 2025
  • Central banks may buy 900 tonnes this year
  • Prices could hit $4,000/oz by mid-2026
  • US-China trade tensions fueling stagflation fears
2 min read

Gold will remain most optimal hedge in 2025 and 2026 amid stagflation, recession, debasement and US policy risks: J P Morgan

JP Morgan predicts gold prices could hit $4,000/oz by 2026 as stagflation, recession, and US policy risks drive demand.

"Gold remains one of the most optimal hedges for stagflation, recession, and US policy risks – JP Morgan"

New Delhi, April 25

Global investment banking giant JP Morgan has reaffirmed its bullish stance on gold, projecting it as the most optimal hedge through 2025 and 2026 amid mounting risks of stagflation, recession, currency debasement, and U.S. policy uncertainties.

"For investors, we think gold remains one of the most optimal hedges for the unique combination of stagflation, recession, debasement and US policy risks facing markets in 2025 and 2026.", said the report

The report highlighted the strong momentum in gold prices seen in the first quarter of 2025 as a clear indicator of investor sentiment.

It estimates net gold demand from investors and central banks to average around 710 tonnes per quarter this year, well above the 350-tonne threshold needed to maintain price stability.

According to the analysis, a 100-tonne increase in quarterly demand could push prices up by 2 percent. It also forecasts that central banks will purchase approximately 900 tonnes of gold in 2025, with investor appetite--particularly from exchange-traded funds (ETFs) and Chinese buyers--expected to grow.

It said, "The macro environment remains ripe for both sustained elevated levels of purchases by central banks (900 tonnes forecasted in 2025) as well as a further expansion in investor holdings, particularly from ETFs and China."

JP Morgan cited rising U.S. tariffs and escalating trade tensions with China as key contributors to a higher likelihood of economic slowdown.

The bank noted signs of stagflation--where slow growth and high inflation coexist--further reinforcing the long-term bullish trend for gold. A structural bull case, it said, implies a sustained rise in prices over time.

The report has sharply raised the gold price forecast, expecting it to average USD 3,675 per ounce by the fourth quarter of 2025 from around USD 3400 now. It also sees gold potentially crossing USD 4,000 per ounce by the second quarter of 2026, supported by persistent global economic tensions and heightened recession risks.

It said, "Tariff-driven recession and stagflation risks are forecasted to continue to supercharge gold's structural bull run. We now see gold prices reaching an average of USD 3,675/oz by 4Q25 on the way towards above USD 4,000/oz by 2Q26."

JP Morgan concluded that if demand outpaces current projections, gold prices could exceed expectations sooner than anticipated, cementing its role as a reliable hedge amid growing global uncertainties.

- ANI

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Reader Comments

M
Michael T.
This analysis makes so much sense. I've been gradually increasing my gold holdings since last year and it's been my best performing asset. The stagflation risk is real and gold is proving its worth again as the ultimate safe haven. 💰
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Sarah L.
Interesting read but I wonder if JP Morgan might be overestimating central bank demand. Their 900-tonne prediction seems aggressive when you consider some emerging markets might face liquidity constraints. Still, the overall trend is convincing.
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James K.
$4000 gold by 2026? That's wild! I remember when people laughed at Peter Schiff's $5000 prediction. Maybe he wasn't so crazy after all. Time to rebalance my portfolio I guess.
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Aisha R.
The ETF angle is particularly interesting. I've been watching the flows into gold ETFs and they've been steadily increasing. This report confirms what the smart money is already doing. Might be time to jump in before the big move.
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David P.
While I agree with the general premise, I think the report underestimates how quickly alternative hedges like Bitcoin might capture some of gold's market share, especially among younger investors. The macro case is strong for both assets.
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Emma W.
The Chinese demand factor is huge! With their property market issues and capital controls, gold is becoming the preferred store of value. This could drive prices way beyond current forecasts. 🚀

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