Gold prices are soaring to new heights as global trade tensions and economic uncertainties persist. JPMorgan predicts that the precious metal could reach a staggering $4,000 per ounce by the second quarter of 2026. Central banks, especially those in emerging markets, are playing a significant role in driving up gold prices.
They are diversifying away from the U.S. dollar and increasing their gold purchases as a hedge against geopolitical risks and inflation. According to JPMorgan, central banks are buying an astonishing 710 tonnes of gold every quarter. This strong demand has pushed spot gold prices to their 28th record high in 2025, recently hitting $3,500 per ounce.
That marks an impressive 29% increase year-to-date. Goldman Sachs has also raised its year-end gold target from $3,300 to $3,700. In more extreme scenarios, the bank sees prices potentially reaching as high as $4,500 per ounce.
Several key factors are contributing to the gold rally. Investors are turning to the safe-haven asset amid rising geopolitical uncertainties. Persistent inflation and monetary policy uncertainty are also adding to gold’s appeal.
Gold’s emerging market drive
Additionally, volatile equity markets and lower bond yields are making gold one of the few assets with upside momentum. While the outlook for gold remains positive, there are some risks that could dampen its rise.
If central banks slow their buying, gold would lose a critical support pillar. A stronger-than-expected U.S. economy could also lead the Federal Reserve to delay rate cuts or even raise rates again, which would increase real yields and reduce gold’s attractiveness. Despite the record-breaking rally, retail investors are still underexposed to gold.
Gold-backed ETF assets currently represent a lower percentage compared to 2011. Investment in gold ETFs has picked up since February but holdings are still off by about 19% from their highs in October 2020. Gold mining stocks are also benefiting from the rally.
The NYSE Arca Gold Miners Index has advanced roughly 50% through Thursday’s close, outperforming the S&P 500 which has lost close to 10% over the same period. Newmont, the world’s largest gold mining company, is the best-performing S&P 500 stock so far this year with gains over 50%. As gold continues to break new records, analysts and investors will be closely watching to see if the precious metal can sustain its momentum.
With central bank demand expected to remain strong and global uncertainties persisting, the $4,000 price target set by JPMorgan may not be far off.
