Bank of America predicts that gold could climb above $3,500 an ounce, a move largely driven by rising demand from central banks—especially those in developing countries.
BofA strategist Michael Widmer points out that a combined 10% increase in purchases across retail investors, institutional funds, and central banks would be sufficient to push the metal to that level.
The yellow metal has already posted strong gains, rising roughly 28% in 2024 and adding about 10% in early 2025. Widmer says that if retail and institutional investors increase their allocations to gold alongside central banks—raising combined buying by about 10%—the $3,500 target becomes attainable. He also notes that geopolitical or policy risks, such as proposed tariffs, could further encourage investors to seek gold as a safe-haven asset.
Fundamentally, the case for higher gold prices rests on persistent demand from official sectors and a potential broadening of interest among private and institutional holders. Central banks, particularly in emerging markets, have been diversifying reserves away from traditional currencies and into gold. If that trend continues and is matched by higher allocations from funds and individual investors, the market could tighten and exert upward pressure on prices.
Other factors supporting the outlook include low real yields, loose monetary policy expectations in certain regions, and ongoing macroeconomic uncertainty. These conditions typically increase gold’s appeal compared with yield-bearing assets, making it more attractive as a portfolio diversifier and inflation hedge. Widmer’s scenario assumes modest additional buying rather than an extreme shift—an incremental reallocation that collectively would be enough to move prices materially higher.
While forecasts are never certain, the combination of central-bank buying, potential retail interest, and institutional demand creates a plausible path toward the $3,500 level. Investors should weigh this view against their own risk tolerance and the broader economic context before making allocation decisions.