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Gold remains on the path to $4,000 as the US dollar weakens - Bank of America
Kitco ^ | August 28, 2025 | staff

Posted on 08/29/2025 12:49:44 PM PDT by Miami Rebel

Gold prices surged to a one-month high above $3,400 an ounce Thursday, supported by persistent U.S. dollar weakness. Analysts at Bank of America expect the rally to continue, maintaining their forecast that the yellow metal will hit $4,000 an ounce by the first half of 2026.

In a report published last week, the bank said falling interest rates and a weaker dollar will underpin the metal’s gains.

“Potential rate cuts amid increasing inflation create fertile ground for dollar depreciation,” analysts wrote. “Rate cuts in an environment of continued elevated inflation would, in all likelihood, push the precious metal higher.”

Spot gold last traded at $3,417.10 an ounce, up 0.64% on the day. At the same time, the U.S. dollar index last traded at 97.81 points, down 0.32% on the day.

Markets expect the Federal Reserve to begin cutting rates as soon as September. The CME FedWatch Tool shows traders have nearly fully priced in a 25-basis-point move, with further easing possible in October and December.

“Recent US data have shifted our view on rates to the downside,” BofA said, pointing to softening labor market trends. “Recent cooling employment data, a narrowing in the breadth of employment growth & other signs of labor market moderation may support a shift the Fed's risk assessment.”

The bank added that political pressure on the Fed, including criticism from President Donald Trump, could weigh further on the dollar.

“Risks to Fed independence are well recognized, but the market now needs to contemplate the implications of institutional erosion at statistical agencies as well,” analysts said.

BofA warned that higher inflation could temporarily lift the dollar as markets scale back easing bets. Economists expect Friday’s core PCE index—the Fed’s preferred inflation gauge—to show a 2.8% annual gain, unchanged from June.

However, Bank of America expects that any rally in the U.S. dollar will be sold.

“Should inflation data continue to come in on the sticky side, leading the Fed to push back more assertively on easing expectations, the USD could experience another relief rally, though we would view such an event as short-lived,” the analysts said.


TOPICS: Business/Economy
KEYWORDS: gold; inflation

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Dollar weak.

Gold strong.

Blowing up the Fed is an additional boost to gold.

I remain long gold through GLD and the Swiss franc through FXF.

1 posted on 08/29/2025 12:49:44 PM PDT by Miami Rebel
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To: Augie; Big Red Badger; CaptainPhilFan; caww; Cleebie Grums; CFW; chud; C210N; ComputerGuy; ...

If YOU would like to be on a Gold & Silver PING LIST, please pm me.

The Gold & Silver Ping List covers the following:

Everything Gold & Silver
Stock market investments in mining companies,
etc.

2 posted on 08/29/2025 1:06:13 PM PDT by aMorePerfectUnion (🦅 MAGADONIAN ⚔️ LIFE )
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To: Miami Rebel

$100s as wallpaper is coming soon.

Mebbe stacks for keeping the home fires burning?

or wheelbarrows full for a loaf of bread?


3 posted on 08/29/2025 1:10:40 PM PDT by Macoozie (Roll MAGA, roll!)
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To: Miami Rebel

“ Summary
• S&P 500 (1986–2025):
• Nominal Average Annual Return: ~11.0%–11.5% (CAGR, including reinvested dividends)
• Real Average Annual Return: ~8.0%–8.5% (inflation-adjusted)
• Gold (1986–2025):
• Nominal Average Annual Return: ~6.0%–6.5% (CAGR, based on price appreciation)
• Real Average Annual Return: ~3.0%–3.5% (inflation-adjusted)”

-Grok


4 posted on 08/29/2025 1:13:27 PM PDT by Uncle Miltie (The U.S spends 13 times (+1,200%) as much per year on Ukraine than it ever has on Israel.)
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To: Miami Rebel

The Saudis just announced that they now will be accepting the Chinese yuan as payment for their oil in addition to the dollar. The petrodollar is over and there will be a minimum devaluation of the dollar by a good 30% over the next couple of years. So yes it would be wise to hold your wealth in some sort of hard asset like gold.


5 posted on 08/29/2025 1:32:10 PM PDT by jimwatx
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To: Uncle Miltie

Bought a baseline Honda Civic in 1978 for $3900. Gold averaged that year $194.00 oz. Basically 20oz of gold in cost. 20oz. as of today, would be $68,000. The 2025 Civic base model is about $25,000. Yeah, I’m good with gold.


6 posted on 08/29/2025 1:38:23 PM PDT by Right Brother (I don't really care Margaret.)
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To: Uncle Miltie
S&P 500 (1986–2025) vs Gold...

Stop confusing people!! /s

7 posted on 08/29/2025 1:38:51 PM PDT by JesusIsLord
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To: Uncle Miltie

That’s misleading and depends on which dates you pick to cover. Gold went up 23% in ‘24 and is up 38% so far in ‘25. Both years beating the S&P by a wide margin.


8 posted on 08/29/2025 1:39:20 PM PDT by jimwatx
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To: Miami Rebel
Blowing up the Fed is an additional boost to gold.

"Because gold is honest money it is disliked by dishonest men." - Ron Paul.

9 posted on 08/29/2025 1:39:44 PM PDT by shaggy eel (A long way south of the border.)
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To: jimwatx

Like the yuan is a better currency.


10 posted on 08/29/2025 1:41:32 PM PDT by RinaseaofDs (Imagine what we'll know tomorrow.)
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To: Miami Rebel

Silver would be my go to...
If it Really got bad.
But
We have Trump!
.
Still sitting on a ton of
Brass, Lead and copper.


11 posted on 08/29/2025 1:45:53 PM PDT by Big Red Badger (ALL Things Will be Revealed !)
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To: jimwatx

Those are my main time horizons for my life of investing.

Perfectly relevant to me.


12 posted on 08/29/2025 1:50:56 PM PDT by Uncle Miltie (The U.S spends 13 times (+1,200%) as much per year on Ukraine than it ever has on Israel.)
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To: jimwatx

Exactly. See my post #6. Cherry picking can produce any stat you wish.


13 posted on 08/29/2025 1:51:48 PM PDT by Right Brother (I don't really care Margaret.)
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To: Right Brother

Did you miss the part where stocks nearly tripled gold’s inflation adjusted rate of return?


14 posted on 08/29/2025 1:51:55 PM PDT by Uncle Miltie (The U.S spends 13 times (+1,200%) as much per year on Ukraine than it ever has on Israel.)
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To: RinaseaofDs

I’m sure those countries being under US sanctions or threatened by sanctions would consider the yuan to be the preferable currency.

Search Assist

“As of February 2025, the United States has active sanctions programs covering countries such as Cuba, Iran, North Korea, Russia, and many others, totaling around 30 countries and regions. The specific number can vary as sanctions are updated frequently.”

Since most countries have huge trade with China and could then use the yuan to swap for Chinese goods why use the dollar in these transactions which would entail additional cost? Face it the dollar is fcked. And we have no one to blame except ourselves for that happening.


15 posted on 08/29/2025 1:55:34 PM PDT by jimwatx
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To: Uncle Miltie

That happens in SOME years whereas gold wins in others. The market is currently bloated and ready for a major correction while gold is in an incredible bull market due to central banks buying tons of it. Why do you suppose central banks are buying gold? But go ahead and keep your money in stocks if you wish.


16 posted on 08/29/2025 2:05:58 PM PDT by jimwatx
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To: Uncle Miltie

Nope, didn’t miss it. If/when the dollar collapses and the market plummets, we’ll compare notes. Figuratively and literally. I’m pretty diversified. Everything is a gamble.


17 posted on 08/29/2025 2:07:27 PM PDT by Right Brother (I don't really care Margaret.)
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To: aMorePerfectUnion; Miami Rebel

Zoykes, Shaggy! :)

Silver is where I’m at these days. Loving the upward trajectory of that, too!

Cashed in some gold in 2024 to pay for a new truck and to pay off the remainder of our crop land. Just $20K, but it was making me crazy having ANY debt with the economy in the cr@pper thanks to Brandon.


18 posted on 08/29/2025 2:18:43 PM PDT by Diana in Wisconsin (I don't have, 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set.)
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To: jimwatx

You gold bugs have no economic sense.

What is the value today of a $100,000 investment in gold versus an investment in the S&P500 (dividends reinvested) made in 1986?

Grok:

“ Comparison and Considerations
• S&P 500 (dividends reinvested): ~$6,560,450
• Gold: ~$951,090
The S&P 500 significantly outperformed gold over this period, largely due to the compounding effect of reinvested dividends and the growth of the U.S. economy. Gold’s performance, while substantial, relies solely on price appreciation and has been more volatile, with periods of stagnation (e.g., 1980s–1990s) and surges (e.g., 2000s, 2020s). Gold’s role as a hedge during crises (e.g., 2008, 2020) is notable, but its long-term returns are lower than equities.”

So I have exactly SEVEN TIMES AS MUCH MONEY as you would have had over my relevant investing lifetime.

You do you. Pauper.


19 posted on 08/29/2025 2:50:57 PM PDT by Uncle Miltie (The U.S spends 13 times (+1,200%) as much per year on Ukraine than it ever has on Israel.)
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To: jimwatx

The market is currently bloated and ready for a major .correction

******************************”

Maybe and maybe not. Boomers own a lot of stocks & real estate. Over the next 10 to 15 years their material and asset holdings are going to be liquidated.

This liquidation will be incremental and may not lead to any large correction in the overall market.


20 posted on 08/29/2025 2:59:22 PM PDT by unclebankster (Globalism is the last refuge of a scoundrel. )
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