Investing.com — Bank of America analysts warned in a note Tuesday that President-elect Donald Trump’s economic policies could weigh on investor sentiment for gold in 2025, despite supportive long-term fundamentals for the precious metal.
In its note, BofA highlighted the impact of higher growth, rising interest rates, and a stronger U.S. dollar on gold prices.
“Higher growth, higher rates, and a stronger USD will likely limit the appetite of investors to increase gold purchases near-term,” the bank states.
The cautious outlook comes despite BofA maintaining its 2025 gold price forecast at $2,750 per ounce, citing long-term support from increasing global public debt and portfolio diversification.
Trump’s proposed tariffs on Chinese imports and the potential for a trade dispute could exacerbate headwinds for precious metals. While tariffs may strain global growth and emerging markets, BofA notes that the broader economic outlook remains uncertain.
Between tariffs, growth, rates, and the USD, the bank sees implications for the mined commodities.
Base metals, too, are expected to be under pressure from trade-related volatility. However, strong fundamentals, including tight supply in aluminium and markets, may help stabilize prices over time.
For gold, the longer-term picture could shift. BofA notes that an “unsustainable fiscal outlook globally may bring investors back to the market further down the line.”
In the meantime, Trump’s policy approach, which emphasizes supply-focused growth in the U.S. and potential Chinese stimulus measures, is seen as setting the stage for heightened volatility across the metals sector.
