JP Morgan has reiterated a firmly bullish outlook for gold, even after precious metals suffered one of their sharpest selloffs in decades.
In a note released late Sunday, the U.S. investment bank said it sees $6,300 per ounce by year’s end, noting that the reasons behind the recent move higher remain intact.
“We remain firmly bullishly convinced in gold over the medium-term on the back of a clean, structural, continued diversification trend that has further to run amid a still well-entrenched regime of real asset outperformance versus paper assets,” JP Morgan said.
The bank expects robust central bank buying and sustained investor demand to support the price. It forecasts official-sector gold purchases of around 800 tons in 2026 as reserve diversification away from the U.S. dollar continues. JP Morgan views this trend as “unexhausted”, providing a powerful backstop even during periods of extreme volatility.
That long-term optimism, however, stood in stark contrast to market action at the start of the week. Gold and silver extended their selloffs in early Monday trading. Spot gold fell to $4,401 per ounce, and silver dropped to $71.30, as investors continued to unwind leveraged positions.
abrdn Physical Precious Metals Basket Shares ETF (NYSE:GLTR) is up 13.74% year-to-date.
Warsh’s Crash and CME Margin Hike
The latest losses followed a crash on Friday, when gold logged its sharpest one-day fall since 1983, plunging more than 9%, while silver suffered its worst daily decline on record, collapsing around 27%. Initial weakness accelerated after U.S. President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair.
“The Warsh nomination, whilst likely being the initial trigger, did not justify the size of the downward move in precious metals, with forced liquidations and margin increases having a cascading effect,” KCM Chief Market Analyst Tim Waterer said per Reuters.
Meanwhile, CME Group raised margin requirements on gold and silver futures once more. Under the new rules, COMEX gold margins were raised from 6% to 8%, while silver margins were raised from 11% to 15%, forcing traders to post more collateral. Higher margins typically weigh on prices by reducing speculative participation and triggering further liquidation as investors scramble to meet margin calls.
Still, even after multiple hikes and a switch to the dynamic margin, the price of precious metals continued to climb until the end of last week.
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