Gold and silver remain on the capital markets’ agenda, according to Bank of America. In a recent analysis, the institution reports that the price target of $4,000 per ounce for gold has already been reached. While analysts anticipate a short-term correction due to the positioning of many market participants, they see upside potential in the medium to long term: For 2026, BofA projects gold prices of up to $5,000 per ounce (average $4,400) and silver prices up to $65 per ounce (average $56.25). This is attributed to a persistently supportive environment – from high government deficits and rising debt to interest rate cut plans with inflation around 3%.
Higher Investment Demand for Gold to be the Strongest Driver in 2026
The assessment focuses on gold, which, according to BofA, recently reached its target corridor of $4,000 per ounce. For 2026, the price surge is primarily linked to higher investment demand: If this increases by around 14% – similar to this year – analysts consider $5,000 per ounce achievable. An even stronger increase in inflows of 28% could even push the market towards $6,000.
The study points to clear indications from the investment sector: In September, ETF inflows into gold rose by 880% year-on-year, climbing to a record $14 billion. Furthermore, the total of physical and derivative gold investments now accounts for more than 5% of the global equity and bond market. This concentration nevertheless suggests the possibility of a consolidating phase. On the macro side, BofA cites the US government’s fiscal policy: Budget deficits, rising debt, efforts to reduce the current account deficit, and an interest rate cut agenda amidst moderate inflation are considered historical supporting factors for gold.
Silver: PV Demand Cools, Market Remains in Deficit
For silver, Bank of America expects an approximately 11% decline in overall demand next year. The background is changes in the solar industry: The technological shift from PERC to TopCon modules, as well as “thrifting” – i.e., lower silver content per wafer – reduce material usage. Additionally, China has accelerated the installation of photovoltaic systems ahead of changed electricity tariffs, meaning that the PV industry’s silver consumption is likely to peak in 2025 from BofA’s perspective.
Despite these dampening factors, silver supply remains tight, according to BofA data. The deficit, which has persisted since 2021, stems from stagnant mine production and structural demand from electromobility and solar. While shortages are expected to more than halve next year, a surplus market is not anticipated. For the silver price, this means: The white metal remains sensitive to supply and demand fluctuations, even as the immediate growth rate of PV-related demand decreases.
Physical Silver Market and Politics: Normalization could Increase Volatility
On the physical side, silver recently experienced significant dislocations. According to BofA, larger quantities were diverted to New York warehouses in anticipation of potential tariffs – measures that ultimately did not materialize. This reallocation tightened the London market and caused leasing rates to rise noticeably. Analysts see scope for a gradual normalization of these disparities. However, such a process could also lead to higher price fluctuations and put short-term pressure on silver before a new equilibrium is reached.
For gold, BofA identifies several risk factors. These include the upcoming US Supreme Court decision on potential presidential tariffs, a potentially more restrictive course by the US Federal Reserve amidst better economic data, as well as the outcome of the next US midterm elections, which could influence the government’s political room for maneuver. Each of these factors can rapidly alter investor sentiment for gold and silver – whether through interest rate expectations, the assessment of fiscal risks, or the attractiveness of safe havens.
From an investor and corporate perspective, the analysis primarily provides one thing: a structural argument in favor of gold as a hedging and diversification component in an environment of high deficits, rising debt, and potentially falling real interest rates. At the same time, the path is not linear. The strong positioning – visible in ETF inflows and futures market activity – can favor short-term pullbacks before an overarching trend continues.
Silver, meanwhile, remains a supply-demand issue: Even with declining PV consumption, BofA signals a persistently tight market for 2026. For industries – from module manufacturers to electronics and automotive – this implies potential cost sensitivities. For producers and projects along the value chain, indications of tight silver supply and the discussion about potential market easing in London and New York are operational parameters that influence procurement and hedging.
Ultimately, Bank of America paints a picture of two precious metals with different drivers but a similar message: Gold benefits from macro- and political-economic conditions, while silver benefits from a persistently tight physical market – even if individual demand components tactically recede. How strongly these factors are reflected in prices depends significantly, from the analysts’ perspective, on the development of investment demand, monetary policy decisions, and trade policy directions in the USA.
