New Delhi– Gold prices pushed higher on Tuesday, supported by a bullish Bank of America outlook calling for the metal to average $4,538 per ounce in 2026 and potentially climb to $5,000 amid sustained macroeconomic tailwinds and rising safe-haven demand.
Global spot gold traded near $4,175 per ounce as investors increased bets on a U.S. Federal Reserve rate cut in December.
According to estimates from the India Bullion and Jewellers Association, the price of 10 grams of 24-carat gold was Rs 1,25,342 at mid-day Tuesday, up from Rs 1,23,308 on Monday.
Bank of America said that gold still has room to rise despite being labeled “overbought” and “underinvested,” noting that institutional allocations remain light even as prices rally.
The bank projected that gold could reach $5,000 per ounce if several macro factors continue to align—among them high government debt levels, persistent inflation, lower interest rates, and the impact of unconventional U.S. economic policies, which have helped fuel gold’s surge.
Other factors to watch include slowing Chinese demand, supply pressures across mined metals, and low global inventories, the bank said.
BofA warned that the primary downside risk is a more hawkish stance from the U.S. Federal Reserve on rate cuts.
Expectations of a December Fed cut rose sharply after New York Fed President John Williams said reduced rates “won’t hurt the Fed’s fight against inflation.” According to the CME FedWatch Tool, traders now see an 81 percent chance of a December rate cut, compared with 40 percent a week ago.
Lower interest rates typically support gold as the metal carries no yield, reducing the opportunity cost of holding it.
On the Multi Commodity Exchange, gold futures for December delivery were up 1 percent at Rs 1,25,106 per 10 grams in early trading. Silver futures also advanced, with December contracts trading 1.34 percent higher at Rs 1,56,551 per kg. (Source: IANS)
