Gold To Hit $4,000 By 2026, But This Rally Is 'Less Dramatic' And Quite Different From Historical Peaks, Says Top Bank

The price of gold has reached unprecedented levels, sparking speculation about a historic surge. However, Bank of America (BofA) Global Research suggests that the situation is more complex than it appears.

Gold Sector Rallies But Lags Past Cyclical Highs: BofA

According to BofA, the gold sector has seen a notable rally, but it is “less dramatic” and has yet to reach all the benchmarks of past cyclical highs, especially in terms of valuation compared to the broader equity market and its historical averages, Fortune reported.

Despite the rally, the gold sector's proportion of the global equity market remains “well below” its former peaks. It currently represents 0.39% of global market capitalization, equal to its 2020 high but still much lower than the 2011 peak of 0.71%.

Gold prices have crossed important thresholds this year, supported by their traditional role as a safeguard against inflation and economic instability. The BofA Commodities team remains bullish, forecasting that the average quarterly price could reach $4,000/oz by Q2 2026.

Although gold equities are not at historically high valuations, BofA’s research indicates they have growth potential if current monetary policy, inflation trends, and investor sentiment persist.

See Also: Bitcoin Steadies At $116,000 While XRP, Dogecoin Push Higher – Benzinga

Gold ETFs, Miners Surge Over 100%, Signaling Stagflation Rally

Analysts support the view that this rally is just the beginning of a new cycle for precious metals and mining stocks. Market strategist Otavio Costa of Crescat Capital asserts that this is "not a bubble," particularly when looking at the gold mining sector.

Price Action: Gold mining ETFs are also rallying with the bullion. On a year-to-date basis, the Themes Gold Miners ETF (NASDAQ:AUMI) surged 105.71%, largely outperforming the Invesco QQQ Trust ETF‘s (NASDAQ:QQQ) 15.7% growth during the same period, as per Benzinga Pro. At the same time, VanEck Gold Miners ETF (NYSE:GDX) climbed 95.30%.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.