Bank of America Maintains Its Gold Forecast for 2025

Bank of America (BAC) predicts that gold prices will reach $3,000 per ounce in the second half of 2025. However, bank analysts indicate that investors may need to be patient due to the prolonged current consolidation period. Michael Widmer, the head of metal research at the bank, noted that gold is currently in an environment where there is no clear catalyst to attract investors. The nation’s second-largest bank pointed out that the gold market may face challenges in the new year due to low demand from China and strong U.S. dollars alongside high bond yields from Western investors. According to analysts, the policies implemented by the Trump administration, which include factors such as growth, high inflation, interest rate increases, and a stronger dollar, could reduce gold’s appeal in the short term.

Bank of America's fixed income strategists anticipate that potential trade tariffs and economic priorities could slow down the Federal Reserve's easing cycle. Two interest rate cuts are expected in March and June of 2025. There is also an expectation that economic uncertainty and geopolitical tensions will increase safe-haven demand for gold and silver. Despite all these challenges, the average gold price is expected to settle at $2,750 per ounce for 2025. The bank believes that geopolitical turmoil and economic uncertainties will boost demand for safe-haven assets, providing support for gold prices.

Current status of gold: Gold rose by 1% in yesterday's trading, closing at $2,660. It started the new day with slight buying momentum and began to show signs of breaking out of the recent narrow range movement between $2,630 and $2,650. As of the last hour, spot gold is attempting to reach $2,670, with a 0.25% increase.