Biggest Bank says Buy Gold

The nation’s biggest bank, JP Morgan Chase & Co. is recommending that clients buy gold, predicting that the precious metal will climb back above $2,000 an ounce this year and soar to a new record high in 2024.

Triggering next year’s rise, the bank predicts, will be a decline in interest rates beginning in the second quarter, as the Federal Reserve eases monetary policy after its aggressive rate hiking campaign that began in March of 2022.

“We’re in a very prime place where we think gold ownership and long allocation to gold and silver is something that acts as both a late (economic) cycle diversifier and something that will perform as we look to the next sort of 12, 18 months,” JP Morgan’s Executive Director of Global Commodities Research Greg Shearer said in an online presentation.

JP Morgan Chase expects the Fed’s interest rate increases will trigger a recession, though it anticipates precious metals will perform well no matter how deep the economic decline.

Professional money managers are increasing their exposure to gold, according to Shearer, but more important, he says, is aggressive buying by central banks. “There’s an eagerness here to really buy in and diversify allocation away from currencies,” he said, pointing out that gold is increasingly attractive to governments because of geopolitical risks, including Russia’s war against Ukraine and growing tension between China and the west.

Gold hit an all-time record high of $2,072.50 in 2020, and traded above $2,000 in April and May of 2023.