Source: Finance Universe
Gold has become a big winner amid tariff chaos and geopolitical uncertainties – it still has significant upside potential if foreign buyers start to increase their allocations, JPMorgan said.
The Wall Street giant predicts that international institutional investors may be rethinking their risk-reward expectations for U.S. assets as the current uneasy macro environment keeps them on high alert. If they shift 0.5% of their U.S.-based overseas assets into gold, the move could push gold prices above $6000 per ounce before early 2029, JPMorgan stated.
"International investors are beginning to reassess the 'excessive privilege' status of the dollar and its identity as a safe-haven asset," Natasha Kaneva, JPMorgan's commodities strategist, wrote in a report to clients. "Gold is well-positioned to benefit from this shift, even though it accounts for only 4% of global asset allocations. Limited supply growth means even a small redistribution could have a significant impact on gold prices."
As an asset considered a store of value during periods of political and financial uncertainty, gold has recently surged to new highs, with prices breaking above $3500 per ounce in April.
Gold has risen by about 26% year-to-date, and another 5% since Trump announced comprehensive tariff hikes on April 2nd.
"While this is just a hypothetical scenario, it explains why we remain structurally bullish on gold and believe there is still room for further upside," Kaneva said.
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