Bank of America (BofA) remains bullish on gold and says prices topping $3,500 could be a reality. Leading global banks and institutional funds predicted that the yellow metal could breach the $3,000 mark in 2025. In 2024 alone, the precious metal surged a record 28% and continues the run in 2025. Its prices have topped more than 10% year-to-date making it the most sought-after asset in the commodity markets.

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Bank of America: Gold Prices Headed Towards $3,500

Going by its stellar performance in the charts, Bank of America is certain that gold prices could climb above $3,500. Commodity Strategist Michael Widmer at BofA wrote in the latest research paper that the demand for gold from central banks is skyrocketing. He wrote the force driving the yellow metal in the charts is mainly the central banks of developing countries.

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Widmer explained that if retail investors, institutional funds, and central banks combinedly increase their purchases by 10%, gold prices could rapidly increase and top a new high of $3,500. “That’s a lot, but not impossible,” he wrote in the latest paper shared with the bank’s clients.

“So far, gold (prices) has rallied mostly on the back of exceptional purchases by the official sector,” read the report. “Worried about the US fiscal deficit, trade disputes, wars, sanctions, and asset freezes, central banks and other investors have pushed spot gold prices to a record.”

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Central banks of developing countries are diversifying their reserves and accumulating tons of gold since 2022. China, Russia, India, Brazil, and South Africa have been regularly adding precious metal to the reserves. The move aided gold prices to surge which inadvertently made retail investors join the bandwagon and reap the rewards. 2025 could be the year of gold as Trump’s tariffs could disrupt the market and make institutional funds seek a safe haven in the precious metal.