- JPMorgan previously cut its quarterly gold forecast to $4,500, but the market has already surpassed it.
- The asset is trading at $4,485 per ounce following the U.S. Treasury’s decision.
- Among the drivers of further gains, analysts cited, in particular, a more dovish Fed stance, continued dollar weakness, and the likelihood of geopolitical risks.
August 19, 2026, gold rose to $4,525 per ounce, surpassing JPMorgan’s quarterly forecast of $4,500, set by the bank just a month earlier. The precious metal rally accelerated after the U.S. Treasury announced it would double the volume of buybacks of long-term government bonds, pushing yields lower and boosting demand for gold as an asset with no credit risk.
At the time of writing, gold was trading near $4,485 per ounce, and its market capitalization stood at around $31.6 trillion, according to Companies MarketCap.
Back in June, JPMorgan expected gold to end 2026 around $6,000 per ounce. In early July, the bank revised its forecast down to $4,500 due to weaker-than-expected demand and the risk of an earlier rate hike by the U.S. Federal Reserve (Fed).
Why Gold Is Rising Again?
One of the main catalysts for the new rally was the U.S. debt market.
The U.S. Treasury said it will increase the size of buyback operations for Treasury bonds with maturities of 10 to 30 years from at least $2 billion to $4 billion per operation. The new parameters will be in effect from September 9 to November 4.
The decision came after a sharp sell-off in government bonds that pushed yields on 30-year notes to 5.337% — the highest level since 2007. After the Treasury’s announcement, yields fell by nearly 10 basis points, and 30-year bonds traded around 5.19%.
For gold, this is an important signal, as the precious metal does not generate coupon income. When bond yields fall, the opportunity cost of holding gold also declines.
“I think that this will have a huge impact on the long end,” said Dan Gottlander, Citi’s global head of U.S. dollar and Canada swaps trading.
At the same time, he noted that such a move could prompt the U.S. Treasury to increase issuance of short-term debt.
Meanwhile, bond buybacks on their own do not solve the U.S. deficit problem. U.S. government debt surpassed $40 trillion this week, and debt-servicing costs continue to rise.
“It does not change deficits, obviously, and if you are going to buy back the long end, you still will need to issue,” Gottlander explained.
Gold also got additional support from a weaker U.S. dollar. A softer dollar makes dollar-denominated gold cheaper for holders of other currencies and, accordingly, can boost international demand.
What Does Gold Need to Reach $5,000?
JPMorgan’s forecast crossing $4,500 shifts the market’s question: can gold climb another roughly 10% and reach $5,000 per ounce by the end of 2026.
One of the key factors remains central bank demand. According to data from the World Gold Council, in Q2 2026 central banks and other official institutions bought 288.9 tonnes of gold — 62% more than in the same period last year. It was a record figure for Q2.
The biggest buyer in Q2 was Poland, which increased its reserves by 51 tons. China bought 33 tons, and other major buyers included Uzbekistan, Kazakhstan, and the Czech Republic.
China, meanwhile, continues to accumulate gold. According to the World Gold Council, as of the end of June its central bank held 2,346 tons of gold, and purchases in the first half of the year totaled 40 tons.
However, central bank demand alone may not be enough to push toward $5,000. In analysts’ view, the market needs a combination of several factors:
- Easing by the Fed and the prospect of rate cuts
- A decline in long-term US Treasury yields, which reduces the opportunity cost of holding gold, which does not generate interest income
- Further weakening of the dollar
- Deterioration in the US government debt market and rising US fiscal risks
- A fresh flare-up in geopolitical risks
Recall that in January this year, gold surpassed the $5,000-per-ounce mark for the first time in history.
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