Gold Below $4,000? BofA Says the Bottom May Not Be In

Gold's rebound from its recent lows has offered some relief to bulls. Bank of America, however, sees little reason to declare the correction over.

The bank expects gold to average around $4,000 in the fourth quarter and sees a risk that prices could slip below that level over the next three months. Earlier this month, BofA warned that persistent inflation and elevated energy prices could drive gold as low as $3,750.

The longer-term picture is strikingly different. BofA sees gold averaging $4,813 in 2027.

So what stands between the current pullback and the next leg higher?

The Macro Backdrop Still Matters

For BofA, a more durable recovery would require three things: the Fed to stop tightening, the dollar to lose momentum, and inflation and geopolitical risks to recede.

None has happened decisively yet.

Higher Treasury yields and a firmer dollar continue to weigh on gold, while physical demand has softened. BofA says buying from central banks, China and India has slowed, although ETF demand remains comparatively resilient.

That creates a difficult near-term setup for XAUUSD. The metal still has a powerful long-term narrative around inflation and currency debasement, but those themes can take a back seat when real yields and the dollar are moving higher.

The equation could change quickly if the Fed's tightening cycle comes to an end — particularly if that shift coincides with renewed concerns over inflation, fiscal sustainability or the purchasing power of the dollar.

For now, BofA's message is less about calling a new bear market in gold than about waiting for the macro backdrop to turn supportive again.