Bank of America positive about gold as a promising asset for investment in the year to come
Precious metals are among the safest assets for investment in times of economic uncertainty as they act as a hedge against headwinds. After skyrocketing throughout the year, gold prices have finally calmed a bit, trading in the $4,200 to $4,300 range per ounce over the past few weeks, but the Bank of America believes it's just a breather, not the peak. In his 2026 outlook, Bank of America Metals Chief Michael Widmer said the forces propelling the rally are still alive and kicking, and that gold remains largely underinvested. All of this gives room for the yellow metal to reach the $5,000 mark next year, Widmer said, as per Kitco.
Gold opened the year, trading at $2,630/oz, and it kept rising before peaking at $4,300/oz in October. The growth marks a 63% rise year-to-date, which is the best performance the metal has posted since the 1970s, as per The Street. However, the prices have stabilized over the past month, with many expecting it to be the ceiling for the metal. Meanwhile, the Head of Metals Research at BofA says gold prices aren't going to stay flat for much longer. “ I’ve highlighted before that the gold market has been very overbought. But it's actually still underinvested. There is still a lot of room for gold as a diversification tool in portfolios," he stated, as per Kitco.
Widmer added that the bullish run will pick up in the coming year with gold prices surging to $5,000 per ounce. He explained that only a 14% increase in investment demand can get the prices to that mark, and the demand has roughly averaged at that level over the past couple of quarters. He further noted that a 55% increase in investment demand could drive gold prices to $8,000/oz.
BofA's chief metals researcher said that the driver for gold's next leg is the fact that it simply isn't owned enough. Even after a 50% surge in the last year, Widmer says the metal represents just a tiny slice of global portfolios, especially among the big-ticket investors. While the metal represents 4% of the financial market, Widmer shared that it represents only 0.5% of the portfolios of high-net-worth individuals. “When you run the analysis since 2020, you can actually justify that retail investors should have a gold share of well above 20%,” he said. “You can even justify 30% at the moment," he added. He even estimated that the central banks would continue buying gold despite official reserves hitting milestone levels this year.
Apart from BofA, other firms have also shared similar projections for gold. J.P. Morgan has forecast gold prices to hit $5,000/oz by Q4, 2026, while Goldman Sachs has set the target price at $4,900/oz in the next year. On the other hand, Morgan Stanley and UBS share modest but strong estimates of prices reaching $4,500/oz next year. The former named gold a top pick for the year as well, while UBS attributed the estimate to falling rates and persistent geopolitical pressure.
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