Analysts at Bank of America (BAC) are not worried about the current pullback in gold and forecast that the precious metal’s price will reach $5,000 per ounce in 2026.
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Commodities analysts at the U.S. lender say the surge in gold’s price this year has not been extreme and that they expect the rally to continue after the current price correction is over. After rising more than 60% year-to-date and hitting a record high of just over $4,300 an ounce, gold’s price has pulled back over the past week and fallen back below $4,000 per ounce.
In its latest “Global Metals Weekly” report, Bank of America writes that gold “has rallied sharply in recent months on a confluence of macro factors.” The lender adds that while the market has become “overbought, the magnitude of the current rally is not out of the ordinary when compared to any of the gold bull markets since 1970.”
‘Push Higher’
Bank of America now forecasts that gold’s price will end 2025 right around $3,800 per ounce, followed by a “push higher to $5,000 per ounce next year.” Gold performs best in periods of macroeconomic uncertainty and market volatility, notes Bank of America.
Past drivers of sustained bull markets in gold have included oil crises, stagflation, trade upheaval, wars, and the COVID-19 pandemic, notes the bank’s analysts. Bank of America added that “gold prices stopped pushing higher only once the underlying drivers changed.”
Bank of America encourages investors to adopt a 60:20:20 portfolio, i.e. 60% equities, 20% bonds, and 20% gold.
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