BofA raises gold price forecasts for 2025, 2026

Bank of America has raised its gold period average forecasts for this year and next, while highlighting that uncertainty arising from US trade policies will continue to lend support to prices in the near-term.

BofA now expects gold to trade at US$3,063 (HK$23,891.4) per ounce in 2025 and US$3,350/oz in 2026, it said in a note on Wednesday. This is an increase from its previous forecasts of US$2,750/oz for 2025 and US$2,625/oz for 2026.

Spot gold is currently trading around US$3,024/oz and has gained more than 15 percent so far this year. This year's record rally has been steered by economic and geopolitical worries sparked by US President Donald Trump's trade policies.

Trump's whirlwind tariff offensive since his January inauguration has been marked by threats, reversals and delays, sometimes within hours of imposition deadlines, as his trade team formulates policy on the fly.

The bank in a note reiterated that if investment demand increases by 10 percent then spot gold prices could climb to US$3,500 within the next two years.

It noted that central banks currently hold about 10 percent of their reserves in gold, and could raise this figure to over 30 percent, which could be a key supporting factor.

However, BofA added that US fiscal consolidation, reduced geopolitical tensions, and a return to collaborative inter-governmental relations, including more targeted tariffs on April 2, are key risks to bullion's rally.

Currently, the main market focus is on potential reciprocal tariffs that the Trump administration might adopt on April 2.

REUTERS