BAC expects gold to hit 3000$ USD (Kitco News) - Gold is still on track to hit $3,000 an ounce next year, but investors will need to be patient, as the current consolidation period could last through the first half of the year, according to Bank of America.
"Right now, gold is just stuck in an environment where we don't have anything tangible to get investors back into the market," said Michael Widmer, BoA's head of metals research during its 2025 Outlook webinar last week.
America's second-largest bank noted that gold faces significant headwinds in the new year as Chinese demand remains lackluster and Western investors contend with potential higher bond yields and a stronger U.S. dollar.
"The Trump administration will, in all likelihood, push through a policy mix that, through stronger growth, higher inflation, higher rates, and a stronger USD, might well limit the appetite of investors to increase gold purchases in the near term," the analysts said in the report.
The bank's fixed-income strategists anticipate that potential trade tariffs and other America-first economic policies could prompt the Federal Reserve to slow its easing cycle in 2025. The analysts expect only two rate cuts next year, one in March and another in June.
Despite the challenges, precious metals analysts expect gold and silver to gain solid support in the new year, driven by economic uncertainty and geopolitical turmoil fueling safe-haven demand.
In its outlook, the bank projects gold prices to average around $2,750 an ounce in 2025, unchanged from its previous forecast.