Oil Price Surge Sparks Warning: Gold Could Plunge Below $3,750
Bank of America has sounded the alarm on high oil prices as a major threat to gold prices in Q4, warning that an extreme scenario could see gold plummet below $3,750.
The bank's latest precious metals outlook notes that persistently high oil prices have become the single biggest short-term threat variable for gold, due to rising energy costs and inflation expectations.
Gold has fallen around 8% since oil prices broke above $90 per barrel on August 20, while crude oil has risen about 15% over the same period. The US dollar index has gained more than 2%, and both nominal and real US bond yields have climbed roughly 50 basis points.
Bank of America projects Q4 gold prices to average around $4,000 per ounce, with downside risk toward $3,750, while its 2027 baseline forecast remains at approximately $4,800.