BCA Flips on Gold: Near-Term Headwinds Fade

BCA Research has reversed its stance on gold, advising clients to go long on the metal as near-term headwinds fade. The firm notes that gold's recent selloff is running out of steam and that its tactical headwinds are easing.

The worst of the downturn for gold likely occurred earlier this year, according to BCA, which says it has fallen 26% since hitting an all-time high on January 29. The firm also believes that real rates, rather than inflation, drive gold's price movement and disputes its reputation as an effective inflation hedge.

BCA traced the bull market through three phases: a surge in central bank demand starting in late 2022, followed by an ETF-driven pickup in 2025. The current phase is characterized by real rates and the dollar reasserting themselves as dominant drivers of gold's price movement.