Spot gold breaks through $4100, Wall Street major banks unusually raise target price to $5000!

Spot gold broke through the $4100/ounce mark on Monday, rising by over $90 in a single day, with an increase of over 2%, hitting a new historical high. So far this year, the price of gold has risen by nearly $1500, with a year-to-date increase of over 56%, making it one of the most eye-catching assets in the global financial market. In the latest report by Bank of America Corp, the medium-term expectations for precious metals have been significantly raised, with the gold target price for 2026 raised to $5000/ounce, and the silver target price raised to $65/ounce. The report states that factors such as "supply constraints, policy uncertainty, and soaring investment demand" are driving gold and silver prices to continue to rise. Michael Widmer, head of commodity research at Bank of America Corp, stated that despite possible short-term fluctuations due to the hawkish stance of the Federal Reserve or trade policy volatility, gold remains the preferred safe-haven asset for investors against the backdrop of fiscal imbalances and macro structural shifts in the Trump administration. The report predicts that if gold investment demand increases by 14% in 2026, the price of gold could rise to over $5000. Data shows that global gold ETF fund inflows have reached a record high, with a total net inflow of $14 billion in September for SPDR Gold Shares (GLD.US) and iShares Gold Trust (IAU.US), an 880% year-on-year increase. Currently, gold investment demand accounts for over 5% of the global stock and bond markets, compared to just 2.8% two years ago. Widmer stated, "The White House's non-traditional fiscal policy path, including expanding deficits, accelerating debt growth, attempting to reduce the current account deficit, and pushing for interest rate cuts with inflation still around 3%, will overall continue to support the upward trend in gold prices." The bank also pointed out that if ETF fund flows continue to grow by 28%, the price of gold "could even reach $6000," but acknowledges that this level is "extremely challenging." The report also emphasizes that multiple structural factors in the silver market will lead to continued supply constraints. Although Bank of America Corp expects global silver total demand to decrease by 11% in 2026, mainly due to a reduction in the amount of silver used in the CECEP Solar Energy photovoltaic industry, the market will be in deficit for the fifth consecutive year due to insufficient mineral supply to meet demand. Technological advancements are also exacerbating structural changes. The report states that the CECEP Solar Energy industry is transitioning from the silver-intensive PERC components to TopCon components, resulting in a decrease in the amount of silver used per unit. In order to catch up with policy subsidies, China is accelerating the construction of photovoltaic installations by 2025, consuming some of the demand ahead of schedule. Of particular note is the "extremely tight" physical silver market. Bank of America Corp pointed out that "due to expectations of tariffs being imposed, a large amount of silver has been transferred to New York, leading to a sharp decrease in London market stocks, a surge in lease rates, and significant market disruptions." Last week, London silver lease rates surged, indicating a tight supply of physical silver. Bank of America Corp expects short-term price fluctuations or corrections, but the overall trend remains upward. "We believe that despite lingering short-term risks, gold and silver are expected to continue to rise in 2026, with average prices expected to be $4400/ounce and $56.25/ounce, with a potential high of $5000 and $65."