JPMorgan analysts suggest that the price of gold could potentially hit $6,000 per ounce by 2029, up from the current level of about $3,300, if a small fraction of U.S. assets held by foreign investors is redirected to gold. This projection comes in the wake of gold’s strong performance in recent years, particularly following the initiation of trade tensions by President Donald Trump.
The analysts envision a scenario where a modest 0.5% shift of foreign-held U.S. assets to gold could drive significant price growth, with annual returns of 18% potentially propelling gold to the $6,000 mark. With the limited expansion of gold supply, a slight uptick in demand could lead to substantial price increases, highlighting the bullish stance on gold maintained by JPMorgan.
Factors such as geopolitical events, like the Russia-Ukraine conflict and subsequent financial sanctions, along with concerns over inflation and budget deficits, have contributed to the positive momentum in the gold market. The policies and actions of the Trump administration, including trade disputes and criticisms of the Federal Reserve, have further fueled interest in gold as a safe-haven asset.
JPMorgan cautions that the U.S. could face vulnerability to capital outflows as trust in American assets wavers, potentially prompting a reallocation of foreign-held assets into gold. While the projected shift may seem relatively small in terms of total gold holdings, the resulting demand surge could have a significant impact on gold prices over the coming years.
These optimistic forecasts align with other bullish predictions for gold, with JPMorgan and Goldman Sachs both anticipating further price increases in the near future. The ongoing dynamics in global markets suggest a favorable outlook for gold as an investment option.
