Gold prices could skyrocket to $3,000 per ounce within the next 12 to 18 months, according to Bank of America’s latest analysis.
Michael Widmer, a commodity strategist at the bank, suggests that a combination of factors — increasing investment demand, geopolitical tensions, Federal Reserve rate cuts and central bank purchases — could boost the yellow metal’s appeal among investors.
Resurgence In Investor Demand
In 2023, investor demand for gold saw a notable resurgence, the investment bank noted, with private bar hoarding and central bank acquisitions accounting for 49% and 43% of purchases, respectively.
However, physically backed ETFs, such as the SPDR Gold Trust (NYSE:GLD), have experienced a decline in assets under management, which has tempered overall demand growth.
“A pick-up in LBMA clearing volumes would be an encouraging signal of rising non-commercial demand for gold, and would be consistent with higher prices needed to balance out the market,” Widmer said.