Gold Set for New Heights: Bank of America Predicts $5,000/oz by 2026

Tight supply, strong macro tailwinds and global economic uncertainty push gold towards record-breaking territory

Gold’s extraordinary rally looks set to continue, according to Bank of America’s latest Year Ahead outlook. The bank now forecasts that the precious metal could reach an unprecedented $5,000 per ounce in 2026, fuelled by a powerful mix of macroeconomic pressures, supply shortages and investors seeking safety amid global uncertainty.

While gold has repeatedly broken records throughout 2024 and 2025, Bank of America believes the rally is far from finished.

Why Gold Could Surge to $5,000/oz

Bank of America argues that gold is supported by an unusually strong combination of factors:

• Underinvestment despite overbought conditions – Gold has seen major price gains, yet institutional investment levels remain relatively low, providing room for further inflows.
• Unorthodox U.S. economic policies – Policies that have weakened the dollar and increased fiscal risks continue to support gold’s safe-haven appeal.
• Sticky inflation and ongoing geopolitical risks – Persistent global uncertainty is pushing more investors towards precious metals.
• Technical momentum – Having broken multiple all-time highs, gold remains in a strong upward trend.

The bank expects gold to average $4,538/oz in 2025, before potentially surpassing the $5,000 mark in 2026.

However, the analysts note one significant downside risk: a hawkish shift from the Federal Reserve. Any rapid tightening in U.S. monetary policy could strengthen the dollar and weigh on gold.

A Challenging Global Outlook Favouring Precious Metals

Despite global economic challenges — particularly in China — gold stands out among precious metals thanks to its clear and persistent tailwinds.

Bank of America highlights several underlying pressures shaping metal markets in 2026:

• Slowing Chinese demand
• Supply shortages in key industrial metals
• Exceptionally low warehouse inventories
• A possible resurgence in electrification, data-centre expansion and AI-related technology
• The continued impact of unconventional U.S. fiscal and economic policy

These combined forces are creating a unique environment where supply-demand tensions and geopolitical risks continue to favour safe-haven assets like gold.

Base Metals: Copper and Aluminium to Remain Tight

The report also outlines a bullish outlook for two critical industrial metals:

Copper

• Supply is expected to remain tight heading into 2026.
• Copper will stay in deficit unless China’s demand drops by more than 3% — a scenario the bank sees as unlikely.
• Stronger consumption in the U.S. and Europe provides further support.
• Long-term demand from electric vehicles, green infrastructure and AI-driven data centres continues to underpin the market.

Aluminium

• Global supply growth remains insufficient to prevent shortages.
• BofA has raised its price forecast to $3,125 per tonne for 2026.
• Energy-intensive production constraints in Europe and China continue to play a key role.

Mixed Prospects Across the Precious Metals Complex

Not all metals are set to move in the same direction:

• Silver – Demand is expected to fall by 11%, driven largely by reduced usage in solar-panel manufacturing.
  Still, BofA sees scope for prices to average $60/oz due to market deficits and constrained supply.
• Platinum – Expected to remain in deficit, with an average forecast of $1,825/oz.
• Palladium – Viewed as oversupplied, with prices forecast around $1,525/oz in 2026.

Overall, the broader precious-metals landscape shows diverging trends, but gold remains the standout performer.

Conclusion: Gold Still Reigns Supreme

Bank of America’s outlook reinforces a clear message: gold’s golden run is not over.
With a rare alignment of macroeconomic support, tight supply and global uncertainty, the path to $5,000 per ounce — once far-fetched — now appears increasingly plausible.

For investors seeking stability amid volatile equity markets, geopolitical tensions and shifting monetary policy, gold may continue to act as one of the most reliable hedges in 2025 and 2026.

Sources: (Investing.com, Reuters.com)