What’s the Forecast?
Bank of America now predicts gold will average around $4,538 per ounce in 2026, with a possible stretch to $5,000 per ounce, assuming current macro-tailwinds persist.
Why They Believe It Can Happen
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The rally to date has broken records: gold recently traded near $4,175 per ounce.
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Key supporting factors:
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Expectations of an interest-rate cut by Federal Reserve in December, lowering the opportunity cost of holding non-yielding assets like gold.
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Persistent global economic uncertainty, high debt levels, and elevated geopolitical risk — all amplifying safe-haven demand.
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Supply constraints: tight mine output, low inventories and rising industrial and investment demand.
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What Could Trip It Up
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A hawkish surprise from the Fed — if they tighten instead of easing, the yield on competing assets rises and gold may fall out of favour.
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If physical demand weakens (especially from major buyers like central banks) or supply conditions improve significantly, the upside story for gold could lose momentum.
What This Means for Investors
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This isn’t just a “buy gold because it’s cheap” call — it’s a structural argument: gold is being positioned as a core portfolio asset rather than a fringe hedge.
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For portfolio construction: if you believe Bank of America's assumptions hold (rate cuts, inflation risks, constrained supply), then gold may deserve a meaningful allocation rather than a token one.
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But don’t treat this forecast as guarantee. It relies on multiple macro-factors aligning. Managing risk and staying diversified still matter.