BoA tells gold to sit, stay, and maybe chill below $4K for a bit 🪙

Bank of America expects gold to trade below $4,000 per ounce over the next three months, with an average forecast of $4,000 in the fourth quarter of 2026, according to an October 12 note reviewed by multiple outlets. Spot gold held around $4,100 on Wednesday following hotter-than-expected U.S. inflation data, leaving the price roughly 27% below its late-January all-time high of $5,598.

The bank's demand tracker shows purchases by key buyers fell 16.6% year-over-year. Indian imports dropped 77.8% and Chinese imports rose 39.3%, while jewelry demand weakened in the second quarter. World Gold Council data cited by BofA shows declines of 25% in the U.S., 15% in India, and 28% in China. Gold ETFs hold a record 4,256 metric tons, and BofA warned those positions could add selling pressure if investors begin to liquidate. Central banks present a two-sided risk. "With the Middle East conflict escalating again, there is a risk that central banks could resume sales," BofA analysts wrote. Through August, Turkey sold a net 82 tons and Russia 56 tons, per WGC figures, while central banks added a net 39 tons in August alone.

The Fed's path remains central to BofA's view. September consumer prices rose 3.7% year-over-year, above the 3.6% forecast, with core inflation at 2.6%. The Federal Reserve raised rates to 3.75%–4% in September and signaled one more hike this year. BofA says gold may bottom only once the Fed exits its tightening cycle, with a pause in the dollar's rally and easing Iran war concerns as additional conditions.

The bank's outlook turns higher further out, with targets of $4,750 in the first quarter of 2027 and $5,000 in the second and third quarters of 2027. Goldman Sachs holds a similar view, cutting its end-2026 target to $4,650 in September while keeping $5,400 for 2027. Technically, BofA flags a possible fourth-quarter low of $3,750, with chart support at $3,900–$4,000 and resistance clustered at $4,300–$4,400.