Gold has been on a remarkable rally this year, soaring over 20% and breaking multiple all-time highs. Analysts now suggest the precious metal could climb even higher amid ongoing global geopolitical uncertainties.
Bank of America recently expressed strong confidence in gold’s upside potential. In a note shared last week, the bank’s experts outlined a scenario where gold prices could reach $4,000 per troy ounce within the next 12 months.
The bank highlighted that continued rate volatility and a weakening U.S. dollar are fueling investor demand for safe-haven assets like gold. Despite recent gains, Bank of America points out that investors remain underexposed to gold, allocating only about 3.5% of their portfolios—well below the 2011 peak allocations.
“Investors have room to increase gold holdings, supporting further price appreciation,” the bank noted.
Central banks have also steadily increased their gold reserves over recent years, but current holdings stand at around 18% of reserves—below the all-time highs seen during the 1970s Bretton Woods period. According to the European Central Bank (ECB), gold remains the second-largest reserve asset after the U.S. dollar.
Geopolitical events such as the recent Israel-Iran conflict have further boosted gold’s appeal. Following the initial bombings, gold futures surged to $3,440, approaching the record high of $3,500. Oil prices also jumped, reflecting concerns over potential escalation.
Looking ahead, JPMorgan has even projected a path for gold to reach $6,000 per ounce, driven in part by a modest 0.5% shift of U.S. foreign assets into the yellow metal.
As geopolitical risks persist and monetary uncertainties continue, gold’s role as a key safe haven appears poised for further growth.
