Institutions are optimistic about the upward potential of gold. What does the $10,000 target price indicate?

Precious metals have recently shown strong performance. On December 24th, gold broke through the $4525 per ounce mark, and silver also hit a historic high of $72.59 per ounce. From the beginning of the year to now, gold and silver have increased by 72% and 145% respectively, making their rally hard to ignore.

Why Are Institutions Optimistic About Gold?

Institutions like JPMorgan Chase and Yardeni Research have recently raised their gold price forecasts intensively, and the underlying logic is worth noting. On one hand, global central banks continue to increase their gold reserves, becoming a long-term support for prices. On the other hand, investors, amid escalating geopolitical risks and currency fluctuations, are diversifying assets by allocating to gold. Fluctuations in exchange rates such as the Renminbi exchange rate and the US dollar index have also boosted the appeal of dollar-denominated precious metals.

How to View Price Targets?

JPMorgan Chase expects gold prices to reach $5055 per ounce in Q4 2026 and further rise to $5400 per ounce by the end of 2027. More aggressive forecasts come from Yardeni Research, which has raised its 2026 end-of-year gold target price from $5000 to $6000 per ounce.

The boldest view is that Yardeni Research predicts that by the end of 2029, gold prices could hit the psychological barrier of $10,000 per ounce. This forecast is based on the ongoing trend of global central banks and asset management institutions continuously allocating to gold.

Where Does the Upside Come From?

Recently, geopolitical tensions have intensified, with the US imposing sanctions on Venezuelan oil tankers, increasing potential military risks. This further reinforces market recognition of the safe-haven value of precious metals. Meanwhile, Hassett, a candidate for Federal Reserve Chair, stated that the US is lagging behind other central banks in cutting interest rates, implying that widening international interest rate differentials are also favorable for the relative performance of interest-free assets like gold.

JPMorgan Chase pointed out that even if only 0.5% of global offshore dollar assets shift into gold, the resulting new demand would be enough to push gold prices up to $6000 per ounce. This indicates that the upside potential is far from being fully realized.