Gold at $4,400: Is it still worth buying after the latest rally?

Gold prices have held near $4,600 an ounce as investors weigh the outlook for US interest rates, with attention turning to Federal Reserve Chair Jerome Powell’s speech at the annual Jackson Hole gathering. The latest move comes after a strong rally that has pushed bullion sharply higher this month, raising questions over whether investors should still buy gold at elevated levels.

Gold rally keeps investors focused on Fed

According to Bloomberg News, gold was steady near $4,600 an ounce on Thursday after earlier gains of as much as 1.1% faded. Bullion had snapped a five-day winning streak on Wednesday after US inflation data showed price pressures remained well above the Federal Reserve’s target, boosting expectations around the path of interest rates. The dollar strengthened and bond yields climbed following the data.

Despite the pullback, gold remains up about 13% this month, Bloomberg News reported. The rally has received fresh impetus from the US Treasury’s unexpected intervention in the bond market last week. Efforts to contain borrowing costs on the country’s growing debt pile have revived investor interest in the so-called debasement trade, which helped fuel gold’s record-breaking rally last year as investors sought protection against large budget deficits and a potentially weaker dollar.

MUST READ: Gold, silver prices today (August 27): Check latest rates in Delhi, Mumbai, Kolkata, other cities

More upside for gold

Against this backdrop, J.P. Morgan Wealth Management remains bullish on gold. Its analysis sees bullion reaching $4,500 an ounce by the end of 2026 and $5,000 by mid-2027, although the bank expects prices could pause or pull back after the recent surge.

J.P. Morgan said several factors are supporting gold, including real yields, the US dollar, central-bank demand, inflation expectations and concerns around fiscal and policy credibility. Yuxuan Tang, Asia Head of Macro Strategy at J.P. Morgan Private Bank, said the initial catalyst for the latest move was the July Federal Open Market Committee meeting, which reduced expectations for further rate hikes and revived concerns about currency debasement.

The bank also pointed to momentum buying by hedge funds, weaker US labour-market data and renewed concerns over US government debt, which is approaching $40 trillion.

ALSO READ: Deepa Jewellers IPO opens on September 1; check price band, issue size & other key details

Should investors buy gold at current levels?

For investors, the question is whether the potential upside justifies buying after such a sharp move. J.P. Morgan’s preferred approach is to treat gold as a portfolio diversifier rather than a return-generating asset, suggesting a strategic allocation of around 5%.

Gold can disappoint when real yields rise or the dollar strengthens, while a strong risk-on environment can also reduce demand for the metal. It is also not guaranteed to move opposite equities.

Central banks remain a key support

Central-bank buying remains an important source of demand. China has purchased gold for 21 consecutive months, with the People’s Bank of China adding 20 tonnes to reserves in July.

The J.P. Morgan analysis suggests investors need not abandon gold above $4,600, but chasing the rally could increase portfolio risk. For long-term investors, disciplined allocation and rebalancing may matter more than trying to time gold’s next move.

ALSO READ: Gold loans made two Indian families billionaires: How their lending empires exploded