Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Bank of America recently suggested gold could reach $3,500. While not its official forecast, this is 16% above the bank’s 2025 price target. The potential surge is informed by heightened policy tensions as Trump 2.0 attempts to squeeze a bold, transformative agenda into a short period. The bank also highlights the positive impact of China’s decision to open its insurance industry to the gold market. These recent bullish moves are further supported by constant central bank consumption amid geopolitical and economic turmoil.
Gold Aiming for $3,500?
In September 2024, Bank of America predicted gold prices would hit a high of $3,000 in 2025. Only eight weeks into the year, the yellow metal is within $50 of hitting this milestone. Since the start of the year, gold has surged over 12% to reach its highest price point, signaling strong momentum. The banking giant stands amidst a growing cadre of financial institutions reconsidering their gold price forecasts for 2025.
Recently, UBS estimated the yellow metal could touch $3,200 in the near future.
At the same time, Goldman Sachs sees a $3,300 price point in the most bullish scenario.
Trump’s Agenda Breeds Uncertainty
Trump’s fast-paced agenda has been a shock to the status quo with disruptive moves leaving a wake of economic and political uncertainty. His aggressive tariff plan has effectively launched a trade war with friends and foes while weighing heavily on domestic prices, business operations, and consumer confidence.
According to Francisco Blanch, commodity strategist for BofA, “The gold market is pricing in increased policy tensions.”
While the bank admits this trade leverage could strengthen the dollar, Trump 2.0 is mulling over strategic devaluation to improve the federal deficit. Generally, a weaker dollar is positive for gold, but the overall climate of economic uncertainty is boosting safe-haven demand.
Chinese Insurers to Inject $28 Billion
Over the past few years, China has emerged as the most active consumer by shedding the dollar in favor of the yellow metal, becoming the largest gold jewelry market, and instituting gold-buying quotas. Most recently, the government announced a pilot program, allowing the behemoth Chinese insurance sector to invest up to 1% of its assets in gold, a move that could inject $28 billion into the market. That equates to roughly 300 additional tons of gold consumption in 2025, a 6.5% demand increase. This considerable and rapid surge in buying is poised to elevate gold prices.
Central Bank Demand Remains Robust
While Trump’s policy shifts and China’s return to the gold market have sent prices soaring in the short term, central bank demand remains the driving force behind gold’s sustained momentum.
As Blanch explains, the yellow metal’s rally is primarily fueled by “exceptional purchases by the official sector.”
These record-breaking purchases have led to central banks accumulating over 1,000 tons of gold annually for the past three years, reversing a prolonged period of sluggish demand. BofA analysts estimate gold could average $3,000 throughout 2025 if demand rises by only 1%. Still, the bank sees $3,500 as a potential high if policy tensions, economic uncertainty, and gold demand persist—a scenario that looks increasingly plausible given persistent domestic instability, dipping consumer confidence, and strong national buying trends.