Gold prices rebounded Thursday after a steep two-day decline, as investors sought safety amid persistent global uncertainty and growing expectations of Federal Reserve rate cuts. Analysts at JP Morgan reaffirmed their bullish long-term outlook, forecasting the metal to average $5,055 per ounce by the fourth quarter of 2026 and potentially climb to $6,000 by 2028.
Spot gold traded around $4,115 an ounce, up 0.4% for the day, while gold futures gained 1.1% to $4,111.50, according to Dow Jones Market Data. The rise followed a 5.7% drop earlier in the week-its sharpest single-day loss in more than a decade-driven by profit-taking and a brief rebound in the U.S. dollar.
"Gold remains our highest conviction long for the year, and we see further upside as the market enters a Fed rate-cutting cycle," said Natasha Kaneva, Head of Global Commodities Strategy at JP Morgan. The bank's outlook is based on investor and central bank demand averaging about 566 tons per quarter in 2026.
JP Morgan analysts attributed the metal's strength to the convergence of monetary easing and global political uncertainty. The combination of a "Fed cutting cycle with overlays of stagflation anxiety, concerns around Fed independence, and broader debasement hedging" supports gold's upside, said Gregory Shearer, Head of Base & Precious Metals Strategy.
Markets are pricing in a 97% probability of a 25-basis-point Fed rate cut at the upcoming policy meeting, according to the CME FedWatch Tool. Lower borrowing costs generally favor gold by reducing the opportunity cost of holding non-yielding assets. The yellow metal has gained nearly 57% year-to-date, setting multiple record highs, including a peak of $4,381.21 on Monday-the strongest annual performance since 1979.
Technical indicators continue to show strength. Gold remains above its 100-day exponential moving average, with the 14-day Relative Strength Index near 57, suggesting steady bullish momentum. Immediate resistance sits at $4,140, while further upside could test $4,330 and $4,365. Key support lies near the $4,000 psychological level, with deeper cushions at $3,947 and $3,838.
Kaneva said the recent pullback was "normal" after rapid gains. "It's normal if you're paralyzed with fear, because the price moved so fast ... It's just a very clean story-you have a lot of buyers, and you have no sellers," she said.
Safe-haven flows continue to underpin the market as geopolitical risks intensify. The U.S. government shutdown, the prolonged Ukraine conflict, and renewed trade tensions with China are all fueling demand for gold. The White House is reportedly weighing export restrictions on advanced software to Beijing ahead of President Donald Trump's meeting with Chinese President Xi Jinping next week in South Korea.
In addition to investor demand, central banks have been key drivers of the rally. Global monetary authorities have stepped up purchases as part of a diversification strategy.
Other precious metals followed gold's lead, with silver rising 1.6% to $48.42 and platinum gaining 3.3% to $1,603.20. Shares of gold miners also climbed, with Newmont Corp. up 0.8% after recovering from earlier losses.
