Bank of America (BAC) has raised its forecast for gold’s price as uncertainty grows about the future independence of the U.S. Federal Reserve.
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Analysts at Bank of America expect gold’s price to reach a record $4,000 an ounce by the first half of 2026. The bullish call comes after gold’s price briefly touched a one-month high above $3,500 an ounce on Aug. 28.
Gold’s price has risen more than 30% over the last 12 months and reached successive new all-time highs in the process as persistent U.S. dollar weakness and geopolitical uncertainty raise the appeal of gold as a safe-haven asset. Bank of America says U.S. President Donald Trump’s efforts to fire Fed Governor Lisa Cook only add to the level of uncertainty.
“Risks to Fed independence are well recognized, but the market now needs to contemplate the implications of institutional erosion at statistical agencies as well,” writes Bank of America in its outlook.
Other Catalysts
Other catalysts that are likely to drive the yellow metal higher in coming months include ongoing wars in Ukraine and the Middle East, as well as falling interest rates in the U.S. and other countries such as Canada and the United Kingdom. Continued weakness in the U.S. dollar should also benefit gold.
“Rate cuts in an environment of continued elevated inflation would, in all likelihood, push the precious metal higher,” writes Bank of America in its forecast for bullion. Spot gold is currently trading at $3,503.00 an ounce. Markets expect the Federal Reserve to begin cutting interest rates in September of this year.
Gold’s Price Movement
The SPDR Gold Shares (GLD) exchange-traded fund (ETF) tracks the spot price of the precious metal. As one can see in the chart below, gold’s price has risen 35% in the last 12 months.
