Gold Market Divided as J.P. Morgan Targets $5,000 Milestone

2025-12-17 economy

New York, Wednesday, 17 December 2025.
J.P. Morgan projects gold reaching $5,000 by 2026, sharply contrasting with technical warnings that the current rally marks the final peak before a multi-year bear market.

Current Market Dynamics and Historical Context

As of Wednesday, December 17, 2025, the precious metal is trading at $4,314.23 per ounce, marking a 0.25% daily increase [3]. This price point represents a significant appreciation of 66.70% compared to the same time last year, highlighting the intensity of the current bull run [3]. While the market is currently testing levels near the all-time high of $4,381.58 established in October 2025, the divergence in expert opinion centers on whether this momentum is sustainable or indicative of a climax [3]. J.P. Morgan’s target of $5,055 per ounce by the fourth quarter of 2026 implies a further upside of 17.17 percent from current levels, a projection rooted heavily in structural demand shifts rather than speculative fervor [2][3].

The Structural Bull Case: Central Bank Demand

The core of J.P. Morgan Global Research’s bullish outlook is the unprecedented volume of gold purchasing by central banks and institutional investors. In the third quarter of 2025 alone, combined demand from these sectors totaled approximately 980 tonnes, a figure that is more than 50% higher than the average over the preceding four quarters [2]. Gregory Shearer, head of Base and Precious Metals Strategy at J.P. Morgan, emphasizes that this demand provides the “firepower” necessary to push prices higher, regardless of short-term fluctuations [2]. The bank projects that central bank purchases will remain robust, estimating around 755 tonnes of acquisition in 2026, alongside a forecast for ETF inflows to reach 250 tonnes [2]. Natasha Kaneva, head of Global Commodities Strategy at the firm, asserts that the trends driving this “rebasing higher” in prices are far from exhausted [2].

The Technical Bear Case: A Looming Reversal

In stark contrast to the fundamental supply-demand analysis, technical indicators suggest the market may be nearing a significant inflection point. Avi Gilburt, founder of Elliott Wave Trader, argues that while the current surge has been powerful, it represents the “final act” of the rally [1]. According to his analysis, once this peak is established, the market is likely to enter a “years-long bear market,” a scenario that would trap investors entering at these elevated valuations [1]. This view challenges the consensus; while most analysts anticipate continued records, Gilburt’s wave analysis points toward a major cyclical downturn commencing after this final push concludes [1].

Macroeconomic Catalysts and Geopolitical Risks

Supporting the immediate bullish sentiment are deteriorating macroeconomic conditions in the United States. On December 10, 2025, the Federal Reserve cut the Fed Fund rate by 25 basis points to a range of 3.5%-3.75% and initiated a bond-buying program of $40 billion per month [7]. This dovish pivot follows data showing the U.S. unemployment rate unexpectedly rising to 4.6% in November, the highest level since 2021 [3]. Furthermore, geopolitical instability continues to drive safe-haven flows; recent tensions escalated after President Donald Trump ordered a “total and complete” blockade of sanctioned Venezuelan oil tankers [3]. These factors have reinforced market expectations for up to two additional interest rate cuts in 2026, creating an environment traditionally favorable for non-yielding assets like gold [3].

Short-Term Technical Outlook

For traders navigating the immediate future, the technical landscape shows gold in a consolidation phase around the $4,300 mark [8]. The metal faces immediate resistance at the weekly top of $4,350 and the all-time high of $4,382 [7][8]. On the downside, the 20-day Simple Moving Average (SMA) at $4,195.66 is providing dynamic support [8]. Algorithmic forecasting models remain optimistic for the very short term, with predictions suggesting the price could reach $4,352.99 by December 23, 2025 [4]. However, with the Relative Strength Index (RSI) currently at 55 and trending lower, there are signs that immediate upward momentum may be limited before the next major move occurs [8].

Sources

Gold Forecast Commodities Market