Gold has been bullish since late 2022, with elevated central bank buying and a buying spree in China causing prices to nearly double.
Bank of America Corp (BAC), Citigroup Inc (C) and Macquarie Group Ltd. have been strong cheerleaders for gold during a breakneck rally that has pushed prices to record highs above US$3,000 an ounce. In the face of growing anxiety about the global economy, they see plenty of reasons to remain bullish.
Gold has been bullish since late 2022, with elevated central bank buying and a buying spree in China that saw prices nearly double in just over two years. Now, it is the bullion's proven status as a safe-haven asset that is attracting investor interest.
Prices breached the US$3,000 an ounce barrier on Friday amid growing angst over economic risks stemming from U.S. President Donald Trump's disruptive trade agenda. U.S. consumer confidence has plummeted, while inflation expectations have soared, and as apprehension grows, many analysts have been raising their price targets.
"We still think some materially bullish developments are likely for gold," said Marcus Garvey, head of commodity strategy at Macquarie, which raised the bank's top price target from US$3,000 to US$3,500 last week. "I really don't see things that suggest to us that this rally is in a zone that has become frenzied or overextended."
Here, illustrated in four charts, are the key factors that have Wall Street betting that the bullion rally has more runway.
ETFs
Investors are net buyers of physically backed gold exchange-traded funds this year, after selling them over the past four years. North America saw a significant inflow in February, the largest in a single month since July 2020, according to the World Gold Council. This was partly contributed to by sentiment stemming from the global rush to ship bullion to the U.S. to capture the large price differential between the New York Comex and the London spot market.