Gold’s Bull Run Accelerates: Why JP Morgan Sees $4,000+ and Beyond
JP Morgan said this week in a note to clients that “after a summer of coiling, gold has finally broken higher once again as ETF inflows have been re-ignited by falling yields ahead of impending Fed cuts. Our strategists still believe gold has even higher to go as we enter into a Fed cutting cycle with overlays of stagflation anxiety, concerns around Fed independence, and broader debasement hedging.”
JPM forecasts gold prices to average $3,800/oz in 4Q25, breaking above $4,000/oz on a spot basis in 1Q26, “driven by strong investor demand and continued central bank purchases”. I concur with this view and would add that if the dollar drops sharply in the year ahead, physical gold buying by both central banks and retail/institutional investors could accelerate. Globally, retail and institutional investors still remain very underweight PGMs on average in most portfolios. There is considerable scope for demand to accelerate.
JP Morgan is among the highest of the major investment banks in terms of their gold price forecasts (Goldman is also up there). JP Morgan is forecasting gold to hit more than +$4,000 by mid 2026 and has a year end target of $4,390/oz, +20% vs spot. The bank is leaning into a dovish view on rates in the US heading sharply lower and noted that “since the early 2000s, gold has consistently rallied both into and following the onset of Fed cuts, returning double-digit cumulative returns over the nine months following the start of recent Fed cutting cycles. The combination of a relatively liquid but small market and overall supply inelasticity leaves gold as one of the most effective hedges against the tail risk of removal or reduction of Fed independence, in our view.”
I agree with this view and have also discussed the implications of Fed independence being undermined, and the likely associated fallout on the US dollar. This outcome could propel gold to new heights but also see the record highs in platinum and silver also challenged in the year ahead. JPM also noted that “even relatively meagre rotations away from the $29trn US treasury market and into gold could have enough firepower to break prices above $5,000/oz. As the team also previously estimated, even a 0.5% shift of foreign-owned US assets to gold could drive gold to $6,000/oz.”
The JPM view is entirely plausible in my opinion. Previous bull market cycles in gold have lasted around 10 years or more. We saw similar cycles playout between 1970 and 1980. Gold increased 20 times after Nixon took the US dollar off the gold standard. Between 2000 and 2011, gold also rallied from $300oz to reach a high near $2000. The incumbent bull market in gold has therefore much further to run in my opinion and could play out over many more years.
We like a range of precious metal miners and ETFs. One miner that I would put on the shopping list should markets correct over the coming weeks, is gold & silver producer Fresnillo (which we hold in our portfolios). JP Morgan revised up their price target this week for Fresnillo to ~£27/sh, representing +24% upside. However, under JPM’s bull case scenario where spot gold hits $6,000oz, they believe that spot price implies £47/sh fair value for FRES and further >100% upside potential.
The precious metal miners are leveraged to higher spot prices and presently generating significant free cashflows – and the best margins in the mining industry. Higher prices will see both cashflow and margins expand for the industry.
Fresnillo shares have risen around +260% YTD and have been one of the best performers amongst our precious metal holdings. FRES has also outperformed the mining peers by a considerable margin making the miner the top performer in the FTSE100 this year. JPM still sees further room for Fresnillo to run further on “macro tailwinds and positive tail risks for gold, and a further re-rating and valuation upside scenario.
We would not be buying Fresnillo today, but would wait for a possible corrective selloff and risk off event to ensue in markets over coming weeks before adding to positions. We called the breakout in Fresnillo (which accompanied a similar move in the silver price) earlier this year. The rally that ensued has been impressive with Fresnillo this week pushing up and breaking out above the 20yr highs at 2000p. Whilst near term risks of a correction are elevated – we believe the 2000p breakout level at the old record highs now provides a key support level.
We hold Fresnillo as a core top 10 position in the Fat Prophets Global Contrarian Fund. In the Global separately managed account portfolio, we hold the Global X Silver miners ETF, where Fresnillo is one of the largest positions, along with silver producer Coeur Mining which has had similar strong performance.
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