Spot gold strongly breaks through 4100 USD, Wall Street major banks rarely significantly raise target price to 5000!

Spot gold strongly broke through the $4,100 per ounce mark on Monday, soaring more than $90 intraday, with an increase of over 2%, continuing to set new historical highs. Since the beginning of this year, gold prices have risen nearly $1,500, with an annual increase of over 56%, making it one of the most eye-catching assets in the global financial market.

According to the latest report released by Bank of America, it has rarely and significantly raised its mid-term expectations for precious metals, increasing the 2026 gold target price to $5,000 per ounce and the silver target price to $65 per ounce. The report points out that driven by the three factors of "supply tightness, policy uncertainty, and soaring investment demand," gold and silver prices still have room for continued upward movement.

Michael Widmer, head of commodity research at Bank of America, stated that although short-term fluctuations may be influenced by the Federal Reserve's hawkish stance or trade policy volatility, in the context of fiscal imbalances under the Trump administration and macro structural shifts, gold remains the preferred safe-haven asset for investors.

The report predicts that if gold investment demand increases by 14% by 2026, gold prices could rise above $5,000. Data shows that global gold ETF inflows have surged to record levels, with net inflows of $14 billion for SPDR Gold Shares (GLD.US) and iShares Gold Trust (IAU.US) in September, an increase of 880% year-on-year. Currently, gold investment demand accounts for over 5% of the global stock and bond market, compared to only 2.8% two years ago.

Widmer pointed out, "The unconventional fiscal policy path of the White House, including expanding deficits, accelerating debt growth, attempting to reduce the current account deficit, and pushing for interest rate cuts while inflation remains around 3%, will overall continue to support the upward trend of gold prices."

The bank also noted that if ETF inflows continue to grow by 28%, gold prices "could even reach $6,000," but acknowledged that this level is "extremely challenging."

The report also emphasizes that multiple structural factors in the silver market will lead to continued supply tightness. Although Bank of America expects global silver demand to decline by 11% by 2026, mainly due to reduced silver usage in the solar photovoltaic industry, the market will experience a supply deficit for the fifth consecutive year due to mineral supply not keeping pace with demand.

Technological advancements are also exacerbating structural changes. The report states that the solar industry is shifting from high-silver-consuming PERC components to TopCon components, resulting in a decrease in silver usage per unit. Meanwhile, China is accelerating photovoltaic installation construction in 2025 to catch up with policy subsidy rhythms, consuming some demand in advance.

Of particular concern is the "extreme tightness" in the physical silver market. Bank of America noted, "Due to previous expectations of tariffs being implemented, a large amount of silver was transferred to New York, leading to a sharp reduction in London market inventories, soaring leasing rates, and significant disruptions in market operations." Last week, London silver leasing rates surged, indicating tightening physical supply.

Bank of America expects that there may be price fluctuations or corrections in the short term, but the overall trend remains upward. "We believe that despite short-term risks, gold and silver still have further upside potential by 2026, with average prices expected to be $4,400 per ounce and $56.25 per ounce, respectively, with highs reaching $5,000 and $65."