Gold's Bounce Faces Headwind from JPMorgan's Sharply Reduced Forecast
Published on 07/04/2026 at 21:14 | Redaktion boerse-global.de
Gold wrestled its way back above $4,180 on Friday, snapping a four-week losing streak that briefly took the metal below $4,000. The rebound — driven by a shockingly weak US jobs report and a softer dollar — arrives just as JPMorgan slashed its year-end price target by 25%, raising questions about how much further this rally can run.
The yellow metal settled at $4,187.30 an ounce, up 1.23% on the day and 2.04% higher on the week. Still, the monthly scoreboard remains deeply negative: a loss of 6.16%. From its January peak of $5,626.80, gold is still down 25.58%, and the current level sits just 7.33% above the October trough — underscoring how far the metal has to climb to reclaim its former glory.
Jobs Shock Sends Rate Expectations Tumbling
June's nonfarm payrolls came in at a paltry 57,000, barely half the 110,000 economists had penciled in. The May reading was also revised lower, to 129,000. The unemployment rate held steady at 4.2%, but the hiring slowdown has sent a jolt through rate markets: the probability of a Federal Reserve hike in July has slid below 20%, according to fed funds futures.
Gold, which pays no interest, thrives when borrowing costs look set to stay low or fall. The greenback added to the tailwind, with the US Dollar Index slipping roughly 0.5% on the week, making dollar-priced bullion cheaper for overseas buyers. Lower Treasury yields — a direct consequence of the jobs miss — further burnished the metal's appeal.
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Central Banks Keep Stockpiling, But JPMorgan Isn't Convinced
The World Gold Council reported that central banks added a net 41 tonnes to their reserves in May, with emerging-market economies leading the charge. The institutional buying spree has been a consistent floor under prices in recent months, and analysts view the continued accumulation as a vote of confidence in gold as a long-term store of wealth.
Yet JPMorgan is betting that sovereign appetite will cool. The bank slashed its fourth-quarter 2026 average price forecast to $4,500 an ounce from $6,000, citing weaker-than-anticipated demand from central banks and institutional investors. For the third quarter of this year, JPMorgan sees gold averaging $4,300. That puts the Wall Street giant well below its peers: Goldman Sachs is calling for $4,900, while UBS and Morgan Stanley both penciled in $5,200. Longer term, the JPMorgan team remains optimistic about 2027, buoyed by physical demand.
Geopolitical Premium Back on the Table
The safe-haven bid has also been reinforced by rising tensions between the US and Iran, with reports of possible threats to the Strait of Hormuz. Such geopolitical risks, which were a major driver of gold's first-half rally, look set to inject continued volatility into the market.
Technical factors added fuel to the bounce. After prices slipped below $4,000 intraweek, oversold indicators flashed, triggering a classic countermove. The recovery pushed gold back above its 20-day moving average, ending the four-week slide. The 50-day average stands at $4,415.02, the 100-day at $4,648.46. The relative strength index of 46.6 signals neutral territory — neither overbought nor oversold.
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Chart Levels to Watch
The immediate hurdle sits between $4,200 and $4,235. Analysts put the odds of a breakout above that zone at roughly 60%. A sustained move higher could solidify the recovery. On the downside, initial support lies at $4,110, followed by the $4,000 round number. A break back under that level would quickly sour the short-term picture.
With a new 24/7 gold CFD trading product set to launch on July 6, volatility outside regular hours is likely to rise. In the weeks ahead, the path of US monetary policy remains the dominant force. Another batch of weak economic data would bolster the recovery — but JPMorgan's aggressive downgrade serves as a sobering reminder that not everyone is convinced the metal has turned the corner.
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