The precious metals markets have recently experienced significant volatility, with gold prices suffering a sudden and historic collapse at the end of last week's trading. The yellow metal incurred sharp losses in a very short period, amidst a strong downward trend that swept through global markets, with prices plummeting to $4,401.05 per ounce, after having reached record highs of $5,597.04 per ounce. This extreme volatility has alarmed many traders, although the outlook from major financial institutions remains highly optimistic.
JPMorgan forecast: $6,300 per ounce
Despite this temporary dip, JPMorgan Chase released a report with a highly positive outlook, predicting that gold is on track to reach unprecedented levels of $6,300 per ounce by the end of this year. This optimistic forecast is based on an accurate reading of market fundamentals, driven by strong and growing demand from central banks, individual investors, and institutions alike, who see gold as a safe haven amidst economic volatility.
Structural diversification and real assets
The bank explained in its research note that optimism regarding gold in the medium term remains strong, supported by a clear and ongoing global trend toward "structural diversification" of investment portfolios. Experts indicate that this trend reflects a shift in global investment strategies, with "real assets" (such as gold and commodities) expected to continue outperforming "paper assets" (such as bonds and currencies), which can be affected by inflation and changing monetary policies.
Central bank purchases: the biggest boost
In a related context, the giant US bank highlighted the pivotal role of central banks in supporting prices, predicting that their gold purchases would reach approximately 800 tons this year. This buying spree by sovereign institutions is supported by the ongoing trend toward diversifying foreign reserves and reducing overall reliance on traditional hard currencies, thus reinforcing gold's status as an indispensable strategic asset in the global financial system.
Historical context and importance of gold
Historically, gold has played a crucial role as a hedge against geopolitical and economic risks. Amid current global tensions and economic uncertainty, gold is once again emerging as a store of value. Expectations of a price of $6,300 not only reflect supply and demand dynamics but also an underlying concern about the future of fiat currencies and a global desire to return to tangible assets with intrinsic value.
A cautious view of silver
Regarding silver, the bank adopted a more cautious tone, indicating that trading in silver is currently more prudent. The bank attributed this to the difficulty in identifying and measuring the precise factors driving its continued price increase compared to gold, making predicting its future trajectory more complex.
