I posted earlier from Goldman Sachs:
Similar now, with strategists at JPMorgan believe the metal's price could more than double within the next three years.
- dismissed the recent tumble, the biggest one-day drop in more than a decade, as a technical profit-taking event by commodity trading advisers, not a fundamental reversal by retail investors, who have been steady buyers.
- core of JPMorgan's bullish case is a structural shift in investor behaviour. They argue that investors are increasingly using gold as a hedge for their equity exposures, replacing the role traditionally held by longer-dated bonds.
- this strategic change, the bank notes, was accelerated after recent tariff-related volatility (post "Liberation Day") caused both stocks and bonds to fall simultaneously, breaking their traditional inverse relationship and rendering bonds an ineffective hedge.
- JPMorgan calculates that nonbank investors currently have a 2.6% allocation to gold. If investors were to shift the approximately 2% of their portfolios traditionally held in long-dated bonds into gold instead, the target allocation would rise to 4.6%.
- Factoring in projected growth in other financial assets, the strategists conclude that "the gold price would have to rise by 110% for the gold allocation to increase from 2.6% currently to 4.6% by 2028."
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JPMs note reframes gold's recent sharp sell-off as a technical, short-term event, providing a strong "buy the dip" signal to long-term investors.
By positing a new, structural source of demand—portfolio hedging—JPMorgan's analysis suggests gold's rally is not just a temporary "debasement" trade but a fundamental repricing. This could create a more resilient floor under the price, as investors may now be conditioned to buy gold both when they fear inflation and when they fear an equity market drawdown.
