Bank of America has increased its gold price forecast to $5,000 per ounce amid surging market indicators and economic risks. The update highlights stagflation concerns and geopolitical tensions driving the rally. Analysts remain divided on whether this signals a supercycle or short-term peak.
The gold market has reached unprecedented levels, with Bank of America lifting its price target for gold to $5,000 per ounce and for silver to $65. This adjustment, detailed in the bank's research, points to rising stagflation risks, persistent US fiscal deficits, and deepening geopolitical tensions as key drivers.
Gold's monthly Relative Strength Index (RSI) has surged to 92.2, marking the most overbought level ever recorded. Data from Walter Bloomberg shows gold-backed ETF purchases jumped 880% year-over-year in September, hitting a record $14 billion in inflows. This surge aligns with reports of record-breaking flows in the 2025 ETF boom.
Bank of America's analysis suggests that persistent inflation from deglobalization, uncertainty around Federal Reserve independence, and mounting US fiscal stress could sustain the rally for another 12 to 18 months. However, the bank anticipates short-term consolidation, citing potential risks such as a hawkish Federal Reserve pivot, Trump tariff rulings, and outcomes from US midterm elections.
Market figures have amplified the discussion. JPMorgan CEO Jamie Dimon stated that gold could easily reach $5,000, or even $10,000, in the current environment, adding, “This is one of the few times in his life when it’s semi-rational to own some.” Technical analyst Michael van de Poppe described the surge as the biggest bull run in gold history.
Sentiment indicators reveal mixed views. The Kobeissi Letter reports that 43% of global fund managers now view “Long Gold” as the most crowded trade, up from near zero a year ago, according to Bank of America’s Global Fund Manager Survey. Yet, average institutional allocation to gold stands at just 2.4%, near an all-time low, suggesting potential for further mainstream adoption.
Skeptics caution against the hype. Veteran trader Toby Cunningham warned, “The masses love buying when prices are high. We sell to the masses, not the other way around.” As gold hovers near record highs, the market faces a crossroads between a possible blow-off top and a decade-long revaluation fueled by global instability.