Big Banks Get Bullish on Gold, But Some Politicians Get Grabby

Well, another big bank has raised its gold forecast.

This time, it’s JPMorgan expressing more bullish sentiment despite the recent correction, raising its 2026 gold forecast from $5,055 per ounce to $6,300.

JPMorgan analysts note that the 11 percent correction late last month ranks alongside some of the largest down days in gold's history, including January 1980's 13 percent fall and the 12 percent slump in February 1983.

However, they emphasize gold bugs shouldn’t be worried, stating that even with the recent near-term volatility, they remain firmly bullishly convinced in gold over the medium-term. JPMorgan believes the uptrend has further to run amid a "well-entrenched regime of real asset ‍outperformance versus paper assets."

JPMorgan analysts also lay out a case for $8,000 gold if households meaningfully increase their allocations. This underscores that while gold may become oversold at times, it is still significantly underinvested.

There has been growing interest in gold as a portfolio diversifier. Last fall, Morgan Stanley CIO Michael Wilson said investors should consider abandoning the traditional 60/40 equity/bond portfolio allocation and adopt a 60/20/20 distribution with 20 percent allocated to precious metals.

On average, Western investors (institutional and private) currently hold less than 1 percent of gold in their portfolios.

JPMorgan analysts estimate private investors currently hold around a 3 percent allocation to gold. If that share rises moderately to 4.6 percent, the incremental demand would challenge a market already constrained by limited new mine supply and persistent central bank buying. This “could suggest a price range for gold” between $8,000 and $8,500 an ounce they suggest.

To support this scenario, analysts say gold appears to be evolving into a “core holding” that is being “rebased higher” in investor portfolios rather than a hedge that occasionally spikes during a crisis.

According to a CNBC report, a JPMorgan strategist recently said households are substituting “duration risk” bonds with more gold exposure. This strategist described it as a rebalancing between yield and purchasing power risk.

The decline in purchasing power is a growing concern as the U.S. government plunges deeper into debt. The only way it can manage its borrowing and spending is through the inflation tax. Despite the cooling CPI, we see increasing inflationary pressure in the money supply.

As for this week’s market action, all the metals are having a real strong day here to close out the week. Gold is up a slight 0.3% but is in positive territory on the week thanks entirely to a nice advance here today of over $60. The yellow metal currently checks in at $5,070 an ounce.

Silver is now about $5 higher for the week and trades at $83.02, with a whole lot of that advance coming here today. Silver is now up 6.4% since last Friday’s close.

As for the PGMs, platinum is up 4.4% to check in at $2,170. And palladium is up 2.6% to come in at $1,753 an ounce, as of this Friday morning recording.

Turning to the public policy front, the Utah senate just shut down an Orwellian government gold scheme, joining Mississippi and South Dakota as the latest states to kill similar legislative proposals this month.

The Utah Senate Government Operations and Political Subdivisions Committee voted on Tuesday to scrap a big government bill called House Bill 195.

A similar variation of HB 195 had been vetoed by Gov. Spencer Cox last year, with the governor complaining of its unworkability and vendor conflicts of interest. However, this year’s version didn't get that far, after Senators recognized the vendor-inspired scheme as unnecessary and entangling.

Here's why this is important. With all the enthusiasm about gold and sound money lately, some really bad proposals are emerging in a handful of states. Self-interested vendors have been trying to get state governments to go into formal partnerships with them to design and launch a government-run precious metals purchase, storage, and electronic payment system -- and then going into competition with private businesses in the sector.

The Utah committee heard compelling testimony against the measure from the Sound Money Defense League and from Kim Coleman from Goldback, Inc. Testimony explained how the bill is anti-free market, anti-sound money, and that there is no compelling state interest for the state government to entangle itself in such an offering, especially when similar services are widely available privately.

Stefan Gleason, CEO of Money Metals Exchange and Money Metals Depository testified that members of the public are generally uncomfortable with government involvement in their gold ownership or their personal financial affairs. He also warned against Utah transitioning from its traditional role as regulator to launching financial products that compete with private businesses, while also creating reputational and regulatory risks for the state.

Prior to Utah this week, Michigan, Wyoming, New Jersey, Oklahoma, Iowa, West Virginia, Idaho, Mississippi, and South Dakota had already abandoned these proposals in response to various criticisms raised by policymakers, businesses, and investors.

We'll be keeping a close watch on all of this here at Money Metals and keeping our customers informed -- particularly if these power grabs come to their individual states. It's alarming to see politicians actually argue that government bureaucrats should be told to take part in the precious metals market and attempt to persuade the general public to deposit their gold and silver into government vaults and embrace a system of government surveillance and control.

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