The Most Radical Forecast for Gold Is Here! Bank of America Is Full of Confidence: It Will Hit $4,000 Within the Year

Commodity analysts at Bank of America (BofA) are becoming increasingly optimistic about the outlook for gold. In a report released by BofA on Wednesday (May 7), the precious metals team led by Michael Widmer predicted that the likelihood of gold prices reaching $4,000 per ounce in the second half of this year is growing.

This latest forecast from BofA is one of the most aggressive among major Wall Street banks.

It is worth noting that in March this year, Widmer and his team had forecast that gold prices would reach $3,500 by 2027. However, this target was achieved in less than a month.

Multiple Driving Factors

Despite BofA's continued bullishness on gold, its analysts pointed out that a series of specific conditions must be met for gold prices to reach the $4,000 target.

The analysts wrote in the report, "To further push up gold prices, investment in gold needs to increase, and jewelry demand must stabilize. Specifically, for gold prices to reach $4,000 per ounce, investment needs to increase by 18% YoY."

They explained, "This may sound like a lot, but purchases in 2016 and 2020 both exceeded this figure, indicating that it is possible."

In addition, regarding other catalysts behind the rise in gold prices by the end of the year, BofA pointed out that geopolitical uncertainties triggered by global trade are the biggest driving force for gold price increases before the end of 2025, and concerns about the fiscal outlook of the US government may trigger the next wave of gold price increases.

Currently, US President Donald Trump describes his global tariff policy as a strategy to reduce US government debt, but BofA economists believe that tariffs are not a reliable source of revenue and tend to generate economic uncertainty as economic growth slows down and consumer prices rise.

The report stated, "Tariffs are an indispensable part of Trump's policy toolkit, but unfortunately they also affect inflation expectations. This puts the US Fed in a dilemma: a slowdown in economic activity, coupled with upward pressure on the overall price level, suggests that real interest rates will remain low – which also supports gold prices."

The report also pointed out, "So far, trade disputes have mainly affected the economy by disrupting supply chains and eroding confidence, and the US dollar has also been falling along with these trends. We still believe that gold may ultimately be a relatively small investment risk compared to US Treasuries. "

Regarding the short-term outlook for gold in the future, BofA believes that gold prices will be easily supported above $3,000 in the short term. "In terms of current capital flows, gold prices can easily trade above $3,000 per ounce, but will not exceed $3,500 per ounce."