Quick overview

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Gold prices are anticipated to rise significantly next year, potentially exceeding $5,000 per ounce, according to JPMorgan Private Bank. The Bullion asset could reach between $5,200 and $5,300 per ounce, as projected by Alex Wolf, the company’s global head of macro and fixed income strategy.

This increase would be more than 25% compared to current trading levels. The primary driver of this anticipated rise is sustained buying by central banks, especially those in emerging market economies.

Gold has performed strongly, influenced by central bank acquisitions as policymakers seek diversification and reliable stores of value.

Before a recent correction, gold prices reached record highs above $4,380 in October; however, the precious metal is still up more than 50% this year. According to JPMorgan, many central banks, particularly in emerging markets, currently hold relatively small amounts of gold as part of their foreign exchange reserves.

Central banks increased their gold reserves by 634 tonnes in the year ending in September, based on data from the World Gold Council. Although this figure is lower than the previous three years, it remains significantly higher than the average before 2022.

These purchases have been primarily driven by China, which aims to reduce its reliance on US-centric financial markets. The World Gold Council forecasts that between 750 and 900 tonnes will be purchased throughout 2025. Other countries contributing to the rising demand for gold reserves include Kazakhstan, Poland, and Turkey.