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Key takeaways

  • Grace Peters, Global Head of Investment Strategy at JPMorgan, expects the price of gold to reach $4,000 per ounce next year.
  • U.S. stocks are expected to outperform thanks to expected interest rate cuts by the Federal Reserve and a possible trade deal with China.

Navigating today's markets

Navigating today's markets requires a focus on diversification, both geographically and in terms of currency. Grace Peters, Global Head of Investment Strategy at JPMorgan, expects gold to reach $4,000 an ounce within the next year, even as U.S. and global GDP grows.

Although optimism about a possible trade deal with China has already been discounted in U.S. stocks, Peters sees the negotiations as positive regardless of the outcome. She expects tariffs to fall, leading to a more favorable effective tax rate for the US. This scenario supports continued economic growth, both in the U.S. and globally, benefiting corporate profits and favoring risky investments.

Diversification outside the U.S.

Peters emphasizes that this is not just a U.S. story. The debate revolves around whether the current administration's policies are cyclical or structural. Investors looking for opportunities will prioritize geographic diversification, with European equities expected to perform alongside U.S. stocks.

JP Morgan is currently setting its price targets for the next 12 months. Peters is confident in U.S. equities, supported by expected interest rate cuts by the Federal Reserve. She expects the S&P 500 to possibly surpass its February high. Two rate cuts are expected this year and two more next year, but inflation dynamics may limit further rate cuts.

JP Morgan reinforces positive view on gold

Peters reinforced JP Morgan's bullish stance on gold, citing diversification as a key driver. The bank aims to balance overweight positions in the U.S. through geographic and currency diversification. Peters points to structural changes in gold trading patterns in recent years and suggests that these trends will continue.

JPMorgan initially predicted a $3,500 price target for gold this year, but now expects that figure to be exceeded. Looking 12 months ahead, they predict a price above $4,000. The main drivers are central bank activity in emerging markets, which still have room to align with counterparts in developed markets, and continued ETF purchases by retailers.

Gold benefits from growth in jewelry and technology sectors

Positive GDP growth is expected to support resilient demand for gold from the jewelry and technology sectors in the coming year. In contrast, JPMorgan expects near-term headwinds for silver due to uncertainty about industrial demand. However, a catch-up period is forecast in the second half of 2025, with prices possibly reaching $39 per ounce by the end of the year.

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