As an analyst with years of deep involvement in crypto and macro markets, I want to discuss something substantial today: Behind the crazy gold market, there is actually a 'power transition' between traditional finance and digital assets. JPMorgan's target of $5055 for gold in 2026 may seem exaggerated, but if you break down its underlying logic, you'll find that this is not just a prediction but a 'warning signal' for the flow of global capital. Here is my exclusive interpretation.
1. The gold bull market under 'mathematical deduction': Demand is the real trump card.
The reason JPMorgan is bullish on gold at $5055 is based on hard data from the supply-demand model: In 2026, global quarterly gold demand from investors and central banks is expected to reach 585 tons, with about 190 tons per quarter from central banks and approximately 330 tons per quarter in gold bars and coins.
Key Threshold: When quarterly demand exceeds 350 tons, every additional 100 tons leads to a month-on-month increase in gold prices of about 2%. This means that as long as central bank and retail buying does not cool down, the rise in gold prices is almost a mathematical certainty.
Central Bank's 'Mechanical Purchases': Even if gold prices break through $4000, the central bank only needs to purchase a small amount of gold to increase its reserve ratio (for example, a central bank with a ratio below 10% needs to increase its holdings by 2600 tons of gold). This structural demand is fundamentally not something that short-term fluctuations can shake.
My viewpoint: The pricing power of gold is shifting from speculative positions to the 'national team'. For example, the central banks of Brazil and South Korea have recently increased their holdings continuously, indicating that de-dollarization has shifted from slogan to action; gold is the 'ballast stone' when the old order collapses.
2. Two major 'undercurrents' entering the market: Chinese insurance capital and crypto capital
The two new buyers mentioned by JPMorgan are the variables in this game:
Chinese Insurance Giants: In March 2025, 10 insurance companies including PICC and China Life completed the first domestic gold transaction. Although the current allocation ratio is limited to 1% of total assets, the scale of insurance capital is as high as 20 trillion yuan, theoretically expected to bring a large amount of incremental funds to the gold market. The long-term nature and low volatility preference of insurance capital is precisely the 'stabilizer' that gold lacks the most.
Crypto Community: Bitcoin recently broke $110,000, but high volatility has led some funds to shift towards gold as a 'safe haven'. Interestingly, the correlation between cryptocurrencies and gold is diverging; before 2024, the correlation between the two was 0.86, but after Trump took office, it dropped to -0.18. This indicates that Bitcoin is more driven by policy sentiment, while gold is the true consensus for safety.
My jest: When veteran investors in the crypto space start hoarding gold bars, it indicates that the market has entered 'risk-averse mode'. Don't forget that silver rose by 102% in 2025, surpassing gold, indicating that high-elasticity assets are still the choice of aggressive players, but gold is the 'safe', while silver is the 'lottery'.
3. The Ultimate Paradox of Gold: After rising to the sky, where will the funds flow?
Behind the surge in gold prices, there are three major narrative explosions:
Federal Reserve Rate Cuts: Historical data shows that gold averages a 6% increase within 60 days after a rate cut. However, the current market has already priced this in, and it remains uncertain whether the future easing cycle can continue to provide support.
Geopolitics: Conflicts in the Middle East and U.S. tariff policies have made gold a 'certainty in uncertainty'.
Dollar Credit Collapse: U.S. debt has surpassed $37 trillion, and global central banks are accelerating diversification of foreign exchange reserves.
However, my core viewpoint is: the more gold rises, the more its limitations are exposed—troubles with physical delivery, high storage costs, and poor liquidity. At this time, portable and censorship-resistant 'digital gold' may find opportunities. For instance, Bitcoin's fixed supply and Ethereum L2's asset tokenization are addressing the physical shortcomings of gold.
4. Insights for Investors: Don't get caught up in the old battleground
Short-term: Gold remains bullish, but pay attention to the pace of central bank gold purchases (755 tons expected in 2026, lower than the three-year peak but higher than the historical average).
Long-term: Gold and cryptocurrencies are not in a substitutive relationship, but rather complementary. Gold resists systemic risks, while crypto seeks high returns; gold anchors the old world, while crypto defines a new order.
Risk: Gold prices are already at a high level; if the Federal Reserve policy reverses or central banks sell, it could trigger a pullback.
Conclusion: The frenzy of gold is just the opening ceremony of the reconstruction of financial order
When JPMorgan uses mathematical models to predict gold prices, we should consider: will the storage form of future value shift from 'hiding in vaults' to 'existing on-chain'? I am a crypto analyst, but I acknowledge that the logic of gold is becoming more solid; at the same time, I also bet that digital assets will find a new narrative amidst the gold bubble.
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