Gold rose about 2% in the past 24 hours to trade around $5,000 an ounce, showing a modest recovery from the sharp decline on January 30 that roiled financial markets. Before this fall, the metal had soared to record levels, driven by rising global conflicts and financial instability. Despite recent fluctuations, major financial institutions remain optimistic: JP Morgan predicts that gold could reach $6,300 an ounce by the end of 2026.
In brief
- JP Morgan projects that gold could reach $6,300 an ounce in late 2026, reflecting continued confidence in the metal.
- Other major banks like UBS, Deutsche Bank and Société Générale also maintain a bullish outlook, with targets around $6,000 to $6,200 per ounce.
- Gold rebounded around $5,000 after a sharp sell-off disrupted markets.
Historic sell-off and unprecedented volatility in gold
Last week's sharp decline marked gold's biggest daily loss since 1983. The drop was triggered when CME Group raised margin requirements on Comex futures: from 6% to 8% for gold, and from 11% to 15% for silver. These new liquidity requirements forced many leveraged traders to liquidate their positions urgently, increasing selling pressure. The result: a wave of sell-offs in precious metals, with massive losses in a single day and high short-term volatility.
During this sell-off, gold experienced extreme price swings, with 30-day volatility exceeding 44%. This was the highest level since the 2008 financial crisis, and even higher than the roughly 39% volatility seen in bitcoin.
Long considered a low-risk asset, the behavior of gold during this period has brought it closer to that of a speculative asset. However, its long-term performance remains solid, with an increase of around 66% over the last 12 months, compared to a decline of 21% for bitcoin over the same period.
Precious metals recover as investors return
Buying interest resurfaced during the Asian sessions of February 3 and 4, propelling spot gold by around 2% in 24 hours, around $5,001 at the time of writing. Silver followed the trend, climbing nearly 7%while bitcoin lagged behind with a drop of more than 3% over the same period. This rebound confirms the lasting appeal of gold as a safe haven in the face of market uncertainty.
The big banks reinforce this bullish reading, emphasizing their confidence in the performance of gold in the medium term:
- JP Morgan is banking on $6,300 per ounce by end of 2026supported by persistent demand from central banks and planned purchases of around 800 metric tons.
- UBS adjusted its target to $6,200 for March, June and September 2026, confirming similar optimism about continued demand.
- Deutsche Bank and Société Générale expect prices to remain around $6,000 or slightly above.
Geopolitical tensions and macroeconomic support
At the same time, rising geopolitical tensions and persistent economic pressures seen over the past six months have continued to drive interest in precious metals. Investors are also closely following developments in the Middle East, where former US President Donald Trump has raised the possibility of new negotiations on the nuclear deal with Iran. Although any diplomatic progress may temporarily reduce demand for defensive assets, anticipated cuts in U.S. interest rates through the remainder of 2026, as well as persistent inflationary pressures, should continue to support gold's appeal among investors.
Overall, gold's recent performance illustrates its resilience and reinforces its position as a key component of a diversified portfolio, with medium- and long-term projections suggesting further gains for both gold and silver.
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