JPMorgan’s head of Asia rates and FX strategy, Yuxuan Tang, thinks gold still has more downside
Tang believes gold finds a floor only when interest rates peak, and expects the Fed to hike in December and again in Q1 2027, which would push 10-year Treasury yields to 5.25-5.5% by midyear
Published
Chart: US10Y, US 10-year Treasury yield, one-minute prices, three sessions
Tang calls the market “pretty fragile,” with very little technical support under $4,000, says gold works as a “stable funding source” during volatile events like the US and Israeli elections, and says it’s hard to call a bottom while the expected yield peak keeps getting higher and later.
On liquidity, Tang says investors are taking smaller bets into year-end, and thin trading can magnify moves. “Any move could be a big move. Liquidity is thin when rates are high. Everyone is competing for capital.”
Tang sees gold rallying strongly later next year once the Fed is done tightening, given its appeal as a hedge against economic and policy risks.
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Why it matters
Tang's call for December and Q1 2027 hikes pushing 10-year yields to 5.25-5.5% is sharper than the forecasts that have circulated since gold reclaimed $4,000 on the retreat from fully priced 2026 hikes (Oct 22 13:03), and it directly contradicts the holding-pattern view that let gold bounce after its prior drop (Oct 26 17:33). His $4,000 floor comment matters because traders had already pulled back from pricing a 2026 move, and a return to active hike bets would reopen the opportunity-cost pressure on bullion that drove October's selloff. The thin year-end liquidity point adds a mechanical risk on top of the rate call, since any renewed hawkish repricing could move gold further and faster than the underlying yield shift alone would suggest.