yolowire.com - Commodities analysts at BankofAmerica (NYSE: BAC) are forecasting that gold’s price will reach $3,000 U.S. per ounce within the next 12 to 18 months.
The outlook is based on continued buying of Gold bullion among central banks around the world and interest rate cuts by the U.S. Federal Reserve, which could lead to inflows into physically backed gold exchange-traded funds (ETFs).
In a note to clients, Bank of America (NYSE:BAC) wrote: “Ongoing central bank purchases are also important, and a push to reduce the share of USD in foreign exchange portfolios will likely prompt more central bank gold buying.”
The analysts say gold continues to be viewed as a long-term value store, hedge against inflation, and effective portfolio diversifier.
These attributes make it an ideal investment in the current environment of high inflation and geopolitical uncertainty, says Bank of America.
The bank also notes a recent World Gold Council survey that found central banks plan to buy more gold in coming months.
Gold buying could accelerate in this year’s second half amid interest rate cuts and as U.S. Treasury markets grow more volatile, noted Bank of America.
The price of gold has risen about 15% this year and currently trades at $2,338 U.S. an ounce.