Gold's soaring so fast it's topped Goldman target set only last week. Now a JPMorgan analyst plots path to $8,500.

By Steve Goldstein

Analyst says households boosting allocations to the metal could send gold soaring

Gold futures are storming higher. But maybe they have a lot further to run.

Way back in olden times - seven days ago - Goldman Sachs lifted its year-end gold price target to $5,400 from $4,900.

Fast forward and the yellow metal is already at $5,500, and it's almost doubled from a year ago.

Gold's (GC00) truly gone parabolic, as has the entire precious metals complex. That Coinbase this week added copper and platinum futures to its platform gives a clear indication that the metals move is now being driven by a decidedly retail crowd of investors. Who needs fartcoin (down 83% from its July peak) when you can trade metals that have been popular for 6,000 years?

So a new note from JPMorgan global market strategist Nikolaos Panigirtzoglou is worth considering.

There's a lot of talk about gold replacing, to some degree, the bond portion of a balanced portfolio. With the run-it-hot, norm-trampling policies from the Trump administration, the perception is that the bigger risk is inflation and currency debasement over an outright recession that bonds would protect against.

It's a theory Panigirtzoglou explored back in October and, if anything, it has more relevance now, post-Venezuela, Greenland, and on the cusp of Iran part II, and after a coordinated "rate check" by U.S. and Japanese authorities to bolster the Japanese yen.

The JPMorgan quant has now assessed what would happen if private investor allocations to gold - which he calculates to be worth 3% of their portfolios right now - would rise to 4.6% in the coming years, as investors swap out longer-duration bonds for the yellow metal.

"This 4.6% allocation to gold would imply a theoretical price of $8,000-$8,500," he writes.

Granted, the road to $8,500 could be a windy one. The same analyst says commodity trading advisers, or momentum traders, are very overbought both silver and gold.

"This raises the risk of profit taking or mean reversion in both gold and silver over the near term," he says.

The market

The S&P 500 (ES00) was poised to open above 7,000, a level that it couldn't hold on Wednesday. Gold futures (GC00) were soaring and crude (CL00) was rising.

   Key asset performance                                                Last       5d      1m      YTD     1y 
   S&P 500                                                              6978.03    1.49%   1.94%   1.94%   15.54% 
   Nasdaq Composite                                                     23,857.45  2.72%   2.65%   2.65%   21.52% 
   10-year Treasury                                                     4.261      1.50    8.90    8.90    -25.80 
   Gold                                                                 5497.9     11.32%  26.91%  26.91%  92.79% 
   Oil                                                                  64.68      8.40%   12.66%  12.66%  -11.70% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

Microsoft shares (MSFT) were bruised as the software giant reported a 66% surge in capital expenditure, while growth at its Azure cloud business wasn't as strong as some investors hoped.

Similarly, SAP shares (SAP) slumped on a slight miss in backlog growth for the German software giant. IBM stock (IBM) was surging after surprisingly strong software sales.

Meta Platforms (META) reported strong advertising numbers.

Tesla (TSLA) said it's invested about $2 billion in xAI, the AI and social media company also run by Elon Musk, and that it's exploring the creation of a Terafab to make its own chips. Earnings for the fourth quarter came in a bit higher than expected.

Apple (AAPL) will report results after the closing bell, with expectations of record iPhone sales.

Keeping to the tech theme, The Information reported that Nvidia (NVDA), Microsoft and Amazon (AMZN)are in talks over a $60 billion investment in OpenAI.

Southwest stock (LUV) is jumping after the airline forecast a big profit and said it's moving to assigned seating.

Weekly initial jobless claims fell by 1,000 to 209,000, the Labor Department reported.

Best of the web

White House to meet with banks, crypto companies on legislation clash.

Why Powell won't say if he is staying on the Fed board.

At world's busiest port, China's unbalanced economy comes into view.

The chart

Keeping to the gold theme, the World Gold Council offered its assessment of demand for the metal this year, saying strong investment demand and steady central bank interest will offset weak jewellery. At the same time, total gold supply only went up 1% last year.

Top tickers

Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.

   Ticker  Security name 
   TSLA    Tesla 
   NVDA    Nvidia 
   META    Meta Platforms 
   MSFT    Microsoft 
   GME     GameStop 
   MU      Micron Technology 
   TSM     Taiwan Semiconductor Manufacturing Co. 
   AAPL    Apple 
   PLTR    Palantir Technologies 
   AMD     Advanced Micro Devices 

Random reads

A huge landslide has left Sicilian homes teering on a cliff's edge.

Citi's former CEO Sandy Weill just gave the largest donation in veterinary medicine to the school that cared for his dog.

A Florida man took on a 200-pound python, and it's no surprise who came out on top.

-Steve Goldstein

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

01-29-26 0832ET