Here’s a number that reveals something huge. As of September 2025, investor holdings of gold represented 2.8% of total assets under management.
Two point eight percent.
You’d think that after a 55% rally in gold prices, investors would have drastically increased their gold allocations. But no. Gold is still a rounding error in most investment portfolios.
But here’s what J.P. Morgan thinks will happen. That 2.8% allocation will likely grow to 4-5% over the coming years.
Why does that matter? Because it’s not a small shift. If investor gold holdings doubled from 2.8% to 4-5%, that would represent massive capital flows into gold.
Let’s do the math. Global assets under management (equities, fixed income, alternatives) are in the hundreds of trillions. A 1-2 percentage point shift in allocation is hundreds of billions of dollars flowing into gold.
And here’s the thing. Gold mine supply is inelastic. Mines take 5-7 years to develop (sound familiar?). So if investor demand suddenly accelerates, there’s no way to quickly ramp up supply. Prices have to rise to ration demand.
J.P. Morgan’s research reveals that ETF inflows in Q3 2025 exceeded expectations based on interest rate changes alone. Normally, ETF flows into gold are driven by interest rate changes. Lower rates = more gold buying (because gold doesn’t yield interest).
But this time, something else is happening. Investors are actively diversifying into gold beyond what interest rates alone would predict. They’re hedging against a combination of:
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Recession risk
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Inflation/debasement risk
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Geopolitical uncertainty
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Trade war risk
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Declining dollar dominance
And they’re just getting started.
J.P. Morgan forecasts around 250 tonnes of ETF inflows in 2026. That’s actually quite modest compared to the 2025 surge. But it’s also conservative, according to the bank’s own assessment.
Bar and coin demand? That’s expected to exceed 1,200 tonnes in 2026. That’s the physical gold investors hold. Not in a fund. Not in futures. Just in their hands or vaults.
Here’s the mind-bending part. If just 0.5% of foreign U.S. asset holdings flowed into gold, J.P. Morgan calculates that would be enough demand to push gold to $6,000/oz.
Think about that. Not 5%. Not 2%. Just 0.5% reallocation.
And that reallocation doesn’t seem crazy. Consider that foreign investors hold hundreds of billions in U.S. assets. Bonds, stocks, treasuries. If even a tiny portion of that shifted to gold due to concerns about U.S. debt, inflation, or policy uncertainty, prices would explode.
The current forecast is $5,000/oz by end of 2026 and $5,400/oz by end of 2027.
But the bank notes that risks skew toward these targets being reached much faster than expected. Because if investor demand surprises to the upside (which it has been), gold prices could spike much quicker.
It’s a classic supply-demand story. Demand is soaring. Supply can’t respond quickly. Prices have to rise to clear the market.
And most investors still haven’t meaningfully reallocated to gold yet. That shift is still ahead of us.