Amid rising U.S. debt concerns, Bank of America has declared gold as the ultimate safe-haven asset and recommended increased holdings for traders and central banks alike. The bank’s analysts, in a recent report, cite fiscal instability and escalating interest payments as factors that could drive gold’s price up to $3,000 per ounce by 2025.
The report argues that with the surging U.S. debt levels, traditional assets like Treasurys are increasingly vulnerable, making gold more attractive as a refuge for investors. Bank of America noted that, “Gold appears to be the last ‘safe haven’ asset standing, encouraging traders and central banks to boost exposure.”
The bank’s projections suggest an 11% potential increase in gold’s value by late 2025, positioning the metal as a resilient alternative in the face of financial uncertainty. Concerns over the U.S. debt trajectory, with interest payments expected to consume a larger portion of GDP, could further enhance gold’s appeal.
Analysts warned that if markets struggle to absorb growing debt or if volatility escalates, gold may emerge as the go-to asset.
Compounding these concerns is the potential for heightened fiscal strain leading into the upcoming presidential election, which could push U.S. debt to unprecedented levels and further burden interest payments. Bank of America highlighted that “something has to give: if market appetite for debt declines amid increased volatility, gold may become the asset of choice.”
In recent weeks, gold has seen heightened attention following the Federal Reserve’s initiation of an easing cycle with a recent rate cut. This policy shift has helped gold prices climb 4.3% over the past month, bolstering its status as a reliable asset in turbulent economic times.
Bank of America’s forecast remains optimistic, anticipating that gold could reach $3,000 per ounce by the end of next year. They concluded, “With ongoing U.S. funding concerns impacting Treasurys, the yellow metal may emerge as the ultimate perceived safe-haven asset.”
As traders and central banks weigh their options in a potentially volatile market, gold’s position as a stable and essential asset appears more compelling than ever.