🟡 Gold Prices Climb on Dollar Weakness — $4,000 Target Still in Sight
Gold is once again shining in the global markets, breaking past $3,400 an ounce and reclaiming bullish momentum amid sustained U.S. dollar weakness. According to analysts at Bank of America (BofA), the yellow metal is on a firm path to $4,000 by mid-2026, as falling interest rates and macroeconomic uncertainty continue to favor safe-haven demand.
In a recently published report, BofA reaffirmed its long-term bullish forecast, citing a weakening dollar, potential rate cuts, and elevated inflation as the key drivers supporting gold’s next leg up.
📉 Dollar Drop Boosts Bullion
On Thursday, gold rallied to $3,417.10, marking a 0.64% intraday increase, while the U.S. dollar index dipped to 97.81, down 0.32%. The inverse correlation between gold and the dollar continues to play out, as a weaker dollar lowers the opportunity cost of holding non-yielding assets like gold and makes it cheaper for international buyers.
BofA noted that recent soft labor data, such as slowing job growth and early signs of a weakening employment landscape, has shifted expectations for the Federal Reserve’s policy stance.
📊 Rate Cuts + Sticky Inflation = Perfect Storm for Gold
Bank of America believes that the Fed is likely to cut rates beginning as early as September, followed by potential reductions in October and December. While high inflation typically supports the dollar, BofA expects any temporary greenback strength to be short-lived, especially if monetary easing accelerates.
“Rate cuts in an environment of continued elevated inflation would, in all likelihood, push the precious metal higher,” said the BofA report.
⚠️ Political Pressure and Institutional Risk Add to Bullish Case
Beyond economic fundamentals, political pressure on the Federal Reserve—particularly from former President Trump—and broader concerns about the erosion of trust in U.S. institutions are also cited as contributing factors to the dollar’s instability.
These systemic risks enhance gold’s appeal as a store of value, especially during times of institutional and political uncertainty.
📅 What’s Next: Inflation Data in Focus
Markets are now turning their attention to the Core PCE Price Index, the Fed’s preferred inflation metric, which is expected to hold steady at 2.8% year-over-year. A lower-than-expected reading would reinforce Fed rate cut bets, while a stronger print could cause a temporary dollar bounce.
Still, BofA remains confident: any such dollar strength would likely be met with selling pressure, keeping gold’s long-term trajectory intact.
🧭 Outlook: Gold Bulls Eye $4,000
- 📈 Current Spot Price: $3,417.10/oz
- 🔮 Medium-Term Target: $4,000 by mid-2026
- 🧾 Key Drivers:
- Rate cut expectations
- Weakening U.S. dollar
- Elevated inflation
- Political uncertainty
Investors looking to ride the wave may find strategic entry points on any pullbacks, as long as the macro environment remains tilted toward monetary easing and dollar weakness.
📌 Stay Informed with DailyGold.pk
Keep up with expert insights, technical forecasts, and breaking economic news at: