Oil Prices Threaten Bank of America's $5,000 Gold Forecast
Bank of America has warned that oil prices pose a significant threat to its forecast of gold reaching $5,000 an ounce in Q2 and Q3 2027. The bank's latest metals strategy outlook suggests that as long as the Iran war keeps crude elevated, energy-driven inflation, rising yields, and a firmer dollar will outweigh gold's haven appeal.
The combination of higher oil prices and a stronger dollar has already pushed gold prices down by about 8% since crude topped $90 on August 20. Bank of America estimates that an oil price spike could cut gold's 2027 average to around $3,500.
The bank also notes that fragile ETF positioning and possible central bank selling are key downside risks for gold. Official buyers turned net sellers in March when higher oil prices strained the currencies and current accounts of energy-importing nations, and about 60 tonnes were sold in Q2.