Bank of America raises gold forecast, noting Trump threat to Federal Reserve independence

Bank of America has lifted its gold price forecast, pointing to mounting concerns about the future independence of the Federal Reserve.

In a new outlook, analysts said they now expect gold to hit a record $4,000 an ounce by the first half of 2026, following a rally that recently pushed prices above $3,500 an ounce, the highest level in a month. Gold has already gained more than 30% over the past year, notching repeated record highs as dollar weakness and global tensions have driven demand for the safe-haven metal.

The bank argued that political uncertainty in the U.S.—including President Donald Trump’s attempt to remove Fed Governor Lisa Cook—has added to market unease. “Risks to Fed independence are well recognized, but the market now needs to contemplate the implications of institutional erosion at statistical agencies as well,” the note said.

Key Catalysts for Gold’s Rise

Beyond Fed concerns, Bank of America sees several other drivers of higher gold prices in the near term. Wars in Ukraine and the Middle East continue to support safe-haven flows, while expected interest-rate cuts in the U.S., Canada, and the U.K. could further strengthen gold. Analysts also pointed to continued U.S. dollar weakness as a key factor.

“Rate cuts in an environment of continued elevated inflation would, in all likelihood, push the precious metal higher,” the bank wrote. Spot gold is currently trading near $3,503 an ounce, with markets pricing in the Federal Reserve’s first rate cut this September.