Central bank buying backs gold bull run, JPM sees $6,300

J.P. Morgan has raised its forecast for gold prices to US$6,300 per ounce by the end of 2026, the highest projection among major global banks, citing sustained buying by central banks and global investors despite sharp short-term market volatility.

In a research note released on Monday, the bank revised up its estimate of central-bank gold purchases in 2026 to around 800 tonnes, saying the trend of reserve diversification remains ongoing and has not yet reached saturation.

Previously, in a mid-December 2025 report, J.P. Morgan had forecast gold at US$5,000 per ounce by end-2026 and estimated central-bank purchases at about 755 tonnes.

“While near-term price volatility is likely to persist, we remain firmly constructive on gold in the medium term, driven by the structural trend of continued portfolio diversification, which still has room to run, particularly as real assets continue to outperform paper assets,” the bank said.

Sharp sell-off shakes market confidence

Gold prices plunged more than 9.8% on January 30, marking the steepest one-day decline since 1983, and extended losses into Monday as selling pressure intensified following CME Group’s decision to raise margin requirements.

CME raised margins for Comex gold futures to 8% from 6%, while margins for Comex 5,000-ounce silver futures were increased to 15% from 11%, adding pressure on leveraged positions and accelerating forced selling.

Despite the sharp correction, other major banks remain positive on gold’s longer-term outlook. Deutsche Bank reiterated its US$6,000 per ounce forecast for end-2026, citing persistent investor demand even amid near-term pullbacks.

2026 gold price targets from major banks

(US dollars per ounce)

• J.P. Morgan: $6,300 (Q4 2026)
• UBS: $6,200 (March, June, September 2026)
• Deutsche Bank: $6,000 (end-2026)
• Société Générale: $6,000 (end-2026)
• Morgan Stanley: $5,700 (bull case, H2 2026)
• Goldman Sachs: $5,400 (end-2026)
• Citi Research: $5,000 (0–3 months)

Gold rebounds as Asian buying returns

Gold prices rebounded sharply in Asian trading on Tuesday (February 3), recovering more than 3% after tumbling 13% over the previous two sessions, as buying interest returned following last week’s extreme sell-off.

Spot gold climbed as much as 4.2% to above US$4,855 per ounce during early trading before easing to around US$4,808.63, up about 3.2%, at 9.07am Thai time.

In contrast, April gold futures on the Comex fell US$92.50, or 1.95%, overnight to settle at US$4,652.60, extending losses after plunging US$609.70 (-11.39%) on Friday — the largest daily fall since 1983.

Spot silver also rebounded strongly, surging as much as 8.1% to above US$85 per ounce before settling near US$83.10, up 6.1%. Platinum and palladium prices also rose.

The Bloomberg Dollar Spot Index slipped 0.1%, after rising 0.3% in the previous session, easing pressure on dollar-priced metals.

China back in focus

Bullion markets had hit record highs last month as investors piled into gold and silver amid renewed geopolitical tensions, a weaker US dollar and concerns over the independence of the Federal Reserve, with speculative buying from China playing a major role in driving prices higher.

That momentum reversed sharply on Friday as the dollar strengthened, triggering heavy profit-taking.

Bloomberg said the next phase of the market will depend on how aggressively Chinese investors step back in on price dips.

Over the weekend, large numbers of buyers flocked to Shenzhen, China’s largest gold trading hub, to stockpile gold jewellery and bullion ahead of the Lunar New Year holidays, during which Chinese markets will be closed for more than a week from February 16. At the same time, major state-owned banks have tightened controls on gold investment to manage volatility.

Analysts: correction, not the end of the bull market

“The fundamental drivers supporting gold prices today are largely unchanged from before Friday’s correction,” said Ahmad Assiri, a market strategist at Pepperstone Group, adding that volatility is likely to remain elevated in the short term as markets digest the shock and reassess risk.

Investors are also closely watching developments involving Iran, after US President Donald Trump said negotiations on a new nuclear deal could take place within days. Any diplomatic progress could reduce gold’s appeal as a safe-haven asset and weigh on prices.

Despite this, analysts broadly agree that the recent plunge represents a sharp but temporary correction, not the end of the gold bull market.

With central banks still buying, expectations of US rate cuts later this year, and global economic and inflation trends remaining uneven, several banks see scope for gold to return to — and potentially exceed — recent record highs in the months ahead.