JPMorgan: The gold bull market is not over! Year-end target cut to $6,000, but the silver myth is being shattered.
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Gold is still waiting for a signal, and silver’s good days may really be over.
According to news from Chase Wind Trading Desk, on May 17, JP Morgan released its latest precious metals research report, written by the commodities research team led by Gregory C. Shearer. Shearer made drastically different judgments regarding the outlooks of gold and silver: Gold is "on pause, not turning"; while silver is facing a fundamental deterioration.
Gold: Stuck Between Two Moving Averages, Investor Interest Falls to the Freezing Point
Shearer stated frankly that in the past few weeks, they have hardly published any reports about gold, for a simple reason—“there’s really nothing to say.”
Gold is currently trapped in a technical "no man's land": above is the 50-day moving average at about $4,730/oz, below is the 200-day moving average at about $4,340/oz, with prices fluctuating sideways in this range.
Meanwhile, market sentiment has also hit rock bottom. COMEX gold futures position and trading volumes remain sluggish, fund net long positions stalled at low levels, and ETF capital inflows have nearly stopped.
Shearer noted, investors are not pessimistic about gold’s long-term logic, but "interest lies elsewhere"—the situation at the Strait of Hormuz, energy prices, inflation trends, and the Fed’s reaction, these uncertainties have left them with almost no confidence in gold’s short-term direction.
Despite the significant pullback in gold in March due to investor deleveraging, Shearer still believes the structural bull market logic of gold remains intact.
Shearer listed several long-term themes supporting gold: erosion of monetary purchasing power (“currency depreciation” trade), US fiscal deficit risk, geopolitical shift toward polarization, and worries about the unpredictability of US policy.
These themes have not disappeared; they have just been “put aside"—waiting for a clearer resolution to the Iran conflict.
Reopening of Hormuz is Key: Gold Prices May Challenge $4,900–$5,100
The bank’s oil market analyst believes that faster depletion of oil inventories will eventually force the reopening of the Strait of Hormuz, with the base scenario being reopening in June.
The analyst passes this judgment straight to gold: once the strait reopens, tail risks for energy prices and inflation will decrease, and the recent strength in the dollar and US Treasury real yields will begin to fade.
Currently, the market has priced the probability of a Fed rate hike within the year at over 60%, but the bank’s economics team baseline forecast is that the Fed will hold steady throughout 2026. If market expectations align with the bank’s view, the dollar will reverse, gold will rebound, and may challenge the critical technical resistance of $4,900–$5,100/oz.
The analyst believes that at that point, investors who had reduced positions will reallocate into gold, accelerating gold prices upward in the second half of the year.
Year-End Target $6,000: Downward Revision in Forecast, Direction Unchanged
Due to a clear slowdown in demand momentum in the first half, the bank has lowered its gold price forecast for full-year 2026.
Specific numbers are as follows:
- Q2 2026 average price forecast: $4,800/oz
- Q3: $5,300/oz
- Q4: $6,000/oz
- Full-year 2026 average: $5,243/oz
The bank expects quarterly demand for gold from central banks and investors in 2026 to average about 620 tons (750 tons in 2025), but significant divergence in pacing: about 480 tons average per quarter in the first half, accelerating to 755 tons in the second half.
Central bank gold buying: Analysts have revised their 2026 central bank net gold purchase forecast down from 800 tons to 640 tons. Q1 data shows Turkey sold 60 tons in March alone, resulting in global central banks reporting net gold buying of only 16 tons, far lower than the 132 tons in Q4 of 2025. However, total estimates from the World Gold Council and Metals Focus (including unreported buying) still reach 244 tons, higher than last quarter’s 208 tons, indicating a substantial increase in implicit gold buying. Attention should be paid to China’s Q1 net gold imports of 317 tons, an increase of nearly 3 times quarter-on-quarter; China’s central bank reported gold purchases have also accelerated from about 1 ton/month previously to 5 tons in March and 8 tons in April.
ETF fund flows: Analysts revised their 2026 ETF inflow forecast from 580 tons down to about 400 tons (about +10%). Despite several weeks of net outflows in March, global gold ETF holdings have still increased by 108 tons (+3%) year-to-date, showing resilience against a roughly 40-basis-point rise in US Treasury 10-year real yields.
Gold bar and coin demand: Forecast about 1,540 tons, up about 10% (previous forecast about 1,390 tons). Q1 global demand for gold bars and coins reached 474 tons, up 42% year-on-year, second-highest quarterly record, with China contributing the main increment (partly driven by VAT rules adjustment). But last week, India raised its gold import tax by 9 percentage points to 15%, which will continue to suppress India’s demand.
Biggest Risk: Fed Really Starts Raising Rates
The bank also pointed out the biggest downside risk: if US employment remains strong and inflation keeps rising, the Fed truly starts a rate hiking cycle, then investor demand for gold will be materially hit, western ETFs may experience sustained net outflows, and with central bank gold buying weakening, gold prices will come under sustained pressure.
Analysts believe the probability of this scenario happening in 2026 is still relatively low, but not impossible.
Silver: Five-Year Deficit Ends, "Outperforming Gold" Logic Collapses
The story of silver, according to the bank, is quite straightforward.
In the past year, silver has vastly outperformed gold, with core support coming from the physical market’s extreme tightness—years of deficit accumulation, and during 2025 massive silver inflow into US COMEX warehouses, causing London spot market liquidity to tighten and the gold-silver ratio to fall sharply.
But this logic has now basically failed.
COMEX silver inventories have now returned to 2024 levels, silver ETF holdings have retreated from highs, and London spot market liquidity is ample. Even when China’s silver imports surged to 836 tons in March (about three times the monthly average over the previous 12 months), it did not create obvious tightness.
Solar Demand: A Critical Variable is Reversing
Analysts point out that the surge in China’s silver imports in March was likely due to photovoltaics firms stocking up ahead of the cancellation of export tax rebates on April 1. After the policy took effect, China’s photovoltaic industry has entered a destocking phase, with Metals Focus reporting that China’s industrial silver demand has weakened significantly since April.
More importantly, this breathing interval has allowed Chinese PV firms to accelerate “silver-saving” technology—including wider adoption of silver-coated copper powder in heterojunction (HJT) solar modules and switching from multi-busbar (MBB) to zero-busbar (0BB) modules.
The bank expects this year silver demand for photovoltaics may decline about 30%, a drop of about 60 million ounces year-on-year.
The result: After five consecutive years of deficit, the silver market will reach supply-demand balance this year, and next year may even see a slight surplus.
Gold-Silver Ratio Will Return to 75:1
The bank believes that as the physical market becomes loose, silver’s ability to sustain notable outperformance relative to gold will depend entirely on investor demand "holding up the whole show", which becomes much harder.
The analyst expects the gold-silver ratio will gradually return, averaging around 75:1 by the end of next year.
However, silver is not completely abandoned. Under the bank’s forecast of gold restarting its bull run in the second half of 2026, silver’s Q4 average price is still projected to reach $90/oz.
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