Bank of America revamps gold price target for 2026

Tue Oct 14 2025

Gold prices are on a tear this year as concerns mount due to rising inflation and unemployment-a double-barreled risk to the U.S. economy. The yellow metal has surged 58% in 2025, trouncing the S&P 500, which is up just 13% year-to-date. Not even the AI-driven and technology-heavy Nasdaq has kept pace. It's up 17%-solid, but nowhere near gold's eye-popping return. Gold's ascent, which has it trading at all-time highs near $4,182, has gold bugs smiling, but likely wondering if the rally is near over. While anything can (and often does) happen, speculators may not want to lock in their gains, based on the latest take from Bank of America. The popular bank, which has one of the most respected Wall Street research teams, just updated its gold price forecast, and its target for 2026 will likely turn some heads.

Gold prices can continue climbing in 2026

Demand for gold has been nothing less than impressive, and interest has spread beyond those who like owning physical gold bars and coins to everyday investors who quickly recognize that allocating some of their money to precious metals can be profit-friendly. According to Bank of America's number crunchers, gold exchange-traded-fund buying increased 880% in September, attracting $14 billion in assets-an all-time high. Physical and paper buying of gold also grew quickly.

Bank of America expects demand to remain strong into 2026.

"The White House's unorthodox policy framework should remain supportive for gold given fiscal deficits, rising debt, intentions to reduce the current account deficit/capital inflows, along with a push to cut rates with inflation around 3%," wrote Bank of America's analysts. The combination of drivers has Bank of America betting that investment demand for gold next year will match what it was in 2025, climbing 14%.

As a result, the bank is adjusting its gold price forecast now that it's eclipsed its prior $4,000 forecast. "We see the risk of a correction near-term, but still expect further upside in 2026, with gold and silver potentially rising to $5,000/oz." said the analysts. The potential for the yellow metal to surge double-digit percentages again next year from current levels won't happen in a straight line, though.

Gold is due for a correction, but it will be short-lived

Zoom in on any long-term price chart and you'll see plenty of pops and drops. That's particularly true for gold, historically prone to jaw-dropping booms and busts. While Bank of America doesn't expect a bust yet, it thinks that gold's recent surge has set the stage for a pullback. "We remain bullish gold, but are also concerned that prices might consolidate near-term," wrote the analysts. "Indeed, downside risks are being discussed a lot and we will look out for the following: 1) the Supreme Court ruling on President Trump's tariffs; 2) a hawkish pivot from the Fed if economic data improves; and 3) the outcome of the US mid-term elections."

Tariffs have been a gold tailwind because they're inflationary and create geopolitical instability while also encouraging a shift away from the U.S. Dollar. If the Fed were to abandon rate cuts, which are also inflationary, it could also dent gold's rally. Furthermore, the mercurial nature of the current administration has been a positive for gold, so a shift in Congress could impact prices.

Those risks to the long-gold argument shouldn't be ignored. Still, Bank of America thinks that consolidation will prove temporary, believing that gold prices can hold $4,000 as long as investors don't hit the sell button, and that a slate of data puts odds of demand increasing in 2026, not falling, including:

· Elevated fiscal deficits.

· Rising debt.

· A push to cut rates, with inflation still running at around 3%.

Gold is considered a safe-haven asset, so rising debt and deficits and the growing concern about financing them are healthy tailwinds. Billionaire Ray Dalio has been pounding the table all year about the risk to the U.S. if it doesn't get its fiscal house in order, and he's on record saying that gold deserves a spot in portfolios as a result.

Gold also performs best during periods of inflation, when the purchasing power of the U.S. Dollar shrinks. With tariffs pressuring inflation and the Fed's newfound friendly monetary policy likely to mean more inflationary rate cuts, the backdrop for gold remains favorable. Of course, there aren't any guarantees. Gold has had some pretty seismic drops historically when economic conditions have stabilized. One needs to look no further than 2011, when post-Great Recession action caused it to hit all-time highs before nose-diving 45% through December 2015.

Source: https://www.miamiherald.com