Commodities analysts at Bank of America (BAC) see gold’s price reaching $4,000 an ounce, which is 20% above current levels, within the next year due to swelling American debt levels.
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Gold, which is widely viewed as a safe haven asset during times of geopolitical uncertainty, has already risen nearly 30% this year on heightened trade tensions, war, and market turmoil. In April of this year, the precious metal’s price reached an all-time high of just over $3,500 per ounce as the tariff war ignited by America sent financial markets for a loop.
Despite the big run higher, Bank of America expects gold’s price to continue gaining as concerns grow over U.S. debt levels. In coming months, Bank of America expects gold’s price to hit $4,000 an ounce as governments, central banks, and investors grow increasingly worried about U.S. debt and deficit spending.
‘Fiscal Shortfalls’
In a note to clients, Bank of America said that U.S. President Donald Trump’s sprawling tax-and-spend legislation that has been passed into law is likely to be a big driver of price action in the yellow metal moving forward. The bill is expected to add trillions of dollars in deficits, raising concerns about the sustainability of U.S. debt and the status of the American dollar as the world’s reserve currency.
“If fiscal shortfalls don’t decline, the fallout from that, plus market volatility, may end up attracting more buyers” to gold, wrote Bank of America. The analysts also pointed to the growing trend of central banks shifting away from U.S. assets such as Treasuries and the dollar and holding more gold in their reserves.
Bank of America estimates that central banks’ gold holdings represent about 18% of the outstanding U.S. public debt, up from 13% a decade ago. A recent survey by the World Gold Council found that most central banks expect to accumulate more gold and less U.S. dollars over the next 12 months.
Is the GLD ETF a Buy?
Analysts don’t typically offer ratings or price targets on the leading SPDR Gold Shares exchange-traded fund (GLD). So instead, we’ll look at the fund’s year-to-date performance. As one can see in the chart below, the GLD ETF has risen 28% so far in 2025.
