Despite market fears over Iran and Russian sanctions, J.P. Morgan believes no real supply disruption will occur. The White House's focus on midterm elections will prevent escalations that impact oil supply, and Russia can easily sell its crude at a discount, leading to a surplus.
For 50 years, commodity sectors moved in sync, driven by global demand. This broke in 2024. Now, supply-side dynamics are causing a divergence, with metals prices surging while energy prices fall, a trend expected to persist through 2027.
Despite short-term price choppiness driven by headline reactions and liquidity issues, the core conviction in gold comes from a simple structural imbalance. Fundamentally, demand is outpacing supply, making it a clean expression of investor preference for real assets.