Gold prices could face further pressure in the final quarter of 2026, with Bank of America (BofA) warning that the precious metal could fall below the $4,000-per-ounce level. The bank has identified a downside risk toward $3,750 per ounce as elevated energy prices and geopolitical uncertainty weigh on the market.
The forecast comes after gold prices declined for the second consecutive week. A price of $3,750 per ounce would translate to roughly ₹1.15 lakh per 10 grams, although the actual price of gold in India would also depend on the rupee-dollar exchange rate and domestic market conditions.
Why Has Bank of America Turned More Cautious on Gold?
BofA has maintained a strongly bullish view on gold for much of the past two years and was among the major institutions to forecast that the metal could eventually reach $5,000 per ounce.
Its latest outlook is more cautious in the near term. The key concern is the impact of higher energy prices on inflation. Rising crude oil prices can increase inflationary pressure, while higher yields and a stronger dollar can also create headwinds for gold.
Despite the short-term risks, BofA has not abandoned its longer-term bullish outlook. The bank continues to see gold averaging around $5,000 per ounce in the second and third quarters of 2027.
Could Gold Fall to Around ₹1.08 Lakh?
BofA has also outlined a more severe scenario for gold. If prolonged tensions in the Middle East push crude oil prices to $150 per barrel, the bank estimates that gold could average around $3,500 per ounce in 2027.
At that level, gold would be equivalent to roughly ₹1.08 lakh per 10 grams, based on the conversion cited in the report. However, the $150 oil scenario is not BofA’s base-case forecast.
The bank has highlighted the conflict involving Iran and wider Middle East tensions as important risks for the gold market. A prolonged conflict could keep energy prices elevated and increase pressure on inflation, yields and currencies.
BofA’s Earlier $5,000 Gold Target
BofA’s bullish $5,000 gold outlook has been closely linked to the strength of investor demand. In January, the bank estimated that investment demand would need to rise by about 14% for gold to sustain prices around $5,000 per ounce.
Since then, investor demand has remained supportive, but BofA now estimates that current demand levels are sufficient to support gold prices closer to $4,000 per ounce.
For gold to move toward the $5,000 mark, investment demand would need to strengthen considerably further. The bank has indicated that achieving such a level could be difficult while geopolitical uncertainty remains elevated.
Central Bank Selling Could Add More Pressure
Another risk identified by BofA is a possible increase in gold selling by central banks.
The bank said higher oil prices could put pressure on the currencies and current-account positions of countries that depend heavily on energy imports. Under such circumstances, some central banks could potentially sell part of their gold holdings to support their economies and currencies.
According to BofA, central banks sold around 60 tonnes of gold during the second quarter, with Turkey leading the selling. Central banks had also become net sellers in March when higher oil prices placed pressure on the currencies and current accounts of energy-importing countries.
BofA has warned that a renewed wave of central-bank selling, combined with investors reducing their holdings in gold-backed exchange-traded funds (ETFs), could create additional downward pressure on gold prices.
Disclaimer: This article is intended for general informational purposes only and should not be considered investment or financial advice. Gold prices can change rapidly due to global markets, currency movements, interest rates, geopolitical developments and investor demand. Readers should verify current prices and consult a qualified financial professional before making any investment decision.