Why JPMorgan says gold prices can recover and surge 34% by the end of the year

• Gold prices tanked on Friday, but one major bank is staying bullish on the yellow metal.
• JPMorgan predicts a gold will spike to $6,300 per ounce by year-end 2026.
• Analyst Gregory Shearer is bullish on gold despite recent market volatility.

The chart for gold might look pretty scary after last week's plunge, but JPMorgan says investors shouldn't bail on the yellow metal.

Gold prices plunged on Friday after President Trump nominated Kevin Warsh to lead the Federal Reserve. The volatility continued on Monday, but JPMorgan thinks it's just a stumble on the path to a much bigger year-end price.

The investment bank updated its 2026 price target for gold to $6,300 per ounce, a roughly 34% increase from its late Monday price of about $4,700. The forecast might seem overly optimistic given what happened on Friday, but the bank's Gregory Shearer maintains that a recovery is coming.

Gold and silver swooned after Warsh's nomination spurred a reassessment of the so-called debasement trade, which has been a major force driving gold to record highs in the last 12 months.

Yet, according to Shearer, investors shouldn't be worried about a further correction. In the note, he highlighted that the demand for the metal is robust and above his team's expectations.

"Even with the recent near-term volatility, we believe longer-term rally momentum will remain intact," Shearer wrote, adding that a continuing trend of diversification will drive the gold to outperform.

Shearer is referring to the demand from central banks, and he says that it will remain on an upward trajectory in 2026. He also predicts that investor appetite will not wane even after the shocking volatility of Friday's sell-off.

"[E]ven with the likelihood of some positioning washing out over this pullback, as gold remains a dynamic, multi-faceted portfolio hedge, we now forecast enough demand from central banks and investor diversification this year to ultimately push gold prices to $6,300/oz
by year end 2026," the analysts wrote.

The bank is less bullish on silver, and Shearer said that his team finds it increasingly difficult to assess the drivers of silver's price. They note that gold will likely benefit as silver corrects in the coming months.

All of this amounts to "a demand environment that is stressing inelastic supply, pushing prices higher in an attempt to eventually re-find market equilibrium."

Overall, the analysts maintain that gold demand is strong enough to carry it to record highs in 2026, regardless of the monetary policies that the Fed pursues with Warsh at the helm. As his team sees it, even dramatic macro shifts likely will not change gold's status as the most effective safe haven asset and portfolio hedge.

"We continue to have the greatest conviction in our bullish view on gold from here, and are more cautious on re-engaging in silver in the near-term until it becomes clearer that some of the recent froth in prices has been fully shaken out," the analysts wrote.