Bank of America (NYSE: BAC) now sees gold soaring to a record $4,000, driven by rising concerns over U.S. fiscal stability, interest rate volatility, and a weakening dollar.
In a June 13 note, the banking giant emphasized that market anxiety about fiscal deficits will not go away anytime soon, regardless of how current Senate negotiations over President Donald Trump’s controversial tax bill unfold.
Adding to the bullish thesis, BofA pointed to climbing rate volatility and a softening dollar as supportive factors for gold, especially if the U.S. Treasury or Federal Reserve is ultimately forced to step in to stabilize markets.
“Rates volatility and a weaker U.S. dollar should then keep gold supported, especially if the U.S. Treasury or the Federal Reserve are ultimately forced to step in and support markets,” BofA noted.
Based on these dynamics, the bank expects gold to reach the $4,000 mark within the next 12 months, a more aggressive target than many other Wall Street forecasts.
Wall Street bullish on gold
Notably, BofA joins the ranks of other financial heavyweights with a bullish stance on the metal. For instance, Goldman Sachs has reaffirmed its forecast for gold to hit $3,700 by the end of 2025 and ultimately touch $4,000 by mid-2026, supported partly by strong, structural central bank buying.
This optimistic sentiment comes after gold nearly reached the $3,500 level, buoyed by its safe-haven appeal amid growing geopolitical tensions in the Middle East, particularly following retaliatory strikes between Israel and Iran.
Meanwhile, gold also caught attention after U.S. inflation data reinforced the Fed’s expectations for upcoming rate cuts.
In May, the Producer Price Index (PPI) rose 2.6% year-over-year, slightly above April’s 2.5%, while core PPI eased to 3% from 3.1%, reinforcing the metal’s appeal as a hedge in a cooling inflation environment.
At close of the last session, gold was trading at $3,432, up 1.3% on the day. Year to date, the yellow metal has rallied more than 30%.
Generally, gold’s uptrend likely remains firmly intact, with potential Fed rate cuts and the fragile geopolitical backdrop serving as key bullish tailwinds.
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