Gold has been on a dazzling run in recent months, repeatedly testing fresh highs and grabbing the attention of investors worldwide. Yet, according to Bank of America’s Commodities Research team, the rally is far from over. In a newly released outlook, the bank forecasts gold could soar to $4,000 per ounce by the second quarter of 2026, extending a bullish streak fueled by economic uncertainty, central bank activity, and shifting investor behavior.
Not Quite at the Top Yet
While headlines tout record-breaking prices, BofA strategists argue that gold has not yet reached its ultimate potential. “We believe there’s significantly more room to run,” the report said, emphasizing that structural and cyclical forces remain firmly in gold’s favor.
The bank highlights that although gold prices are at historic levels in nominal terms, they have not yet surpassed their inflation-adjusted peaks. This distinction suggests that the current rally, while dramatic, may still be in its middle stages rather than its climax.
Why BofA Sees More Upside
Several factors underpin the bank’s bold $4,000 target:
- Central Bank Demand
- Central banks, particularly in emerging markets, have been aggressively stockpiling gold. Persistent geopolitical risks and a desire to diversify away from U.S. dollar reserves have fueled steady buying, which BofA expects to continue.
- Monetary Policy Shifts
- Even as global central banks battle inflation, interest rates are unlikely to stay elevated indefinitely. BofA projects a pivot toward lower rates by 2025, which would reduce the opportunity cost of holding non-yielding assets like gold and provide strong tailwinds.
- Geopolitical Uncertainty
- Ongoing conflicts, trade disputes, and shifting alliances have bolstered gold’s status as a safe haven. From Eastern Europe to the South China Sea, investors are likely to seek shelter in the metal whenever geopolitical tensions flare.
- Weakening Dollar Outlook
- With U.S. deficits climbing and global moves to diversify currency reserves, BofA expects pressure on the dollar to intensify. Since gold is priced in dollars, any sustained weakness in the greenback tends to push the metal higher.
- Investor Demand Through ETFs and Retail Channels
- Retail investors and institutional funds alike have been increasing exposure to gold-backed ETFs. BofA analysts argue that this structural trend will strengthen as market participants hedge against volatility in equities and bonds.
What Could Derail the Rally?
While the outlook is bullish, BofA does caution that gold’s path upward will not be linear. A stronger-than-expected global recovery, persistently high real interest rates, or aggressive dollar strengthening could cap gains. However, in the bank’s view, these risks are outweighed by the broader macro drivers pointing toward higher prices.
Implications for Investors
If gold does reach $4,000 per ounce, it would mark a near-doubling from levels seen just two years earlier. Such a move would have profound effects across asset classes:
- Equities: Mining and exploration stocks could benefit disproportionately.
- Currencies: Dollar-denominated assets might face renewed headwinds.
- Commodities: Other precious metals, such as silver and platinum, may see sympathetic rallies.
For long-term investors, the message from BofA is clear: gold remains a strategic asset, not just a tactical trade.
A Decade-Defining Rally?
If BofA’s forecast proves accurate, gold would cement its role as the defining trade of the decade, echoing historic surges in the 1970s and 2000s. Unlike those rallies, however, today’s dynamics combine both traditional safe-haven demand and structural changes in global finance, creating a unique setup.
As the bank concluded in its note: “This is not the end of the gold story—it’s just the beginning of a new chapter.”
