BofA warns gold could fall to $3,315 as downtrend deepens

Gold fell to $4,010.39 per troy ounce on COMEX, down 1.23% in the past 24 hours, as Bank of America issued a bearish forecast targeting $3,315.

"The downswing in gold prices is far from over, and the correction seen so far this year may still have substantial downside," Bank of America technical strategists said in a note dated July 16. They warned the trend could resemble the devastating bear markets that followed major gold rallies in 1980 and 2011.

The strategists noted that each of the three major gold bear markets since 1970 saw corrections of at least 50% of the preceding rally. If the same pattern repeats, downside risks could point to $3,315 per ounce, implying roughly 16.7% downside from current spot prices. The bank recommended a phased buying strategy, advising investors to complete full allocation only when gold falls into the $3,450-$3,250 range.

Gold has accumulated a decline of more than 3% this week, on track for the biggest weekly drop in six weeks. The 52-week intraday high stands at $5,597.23, set Jan. 29, while the 52-week low is $3,283.00. The next catalyst for gold prices will be the Federal Reserve's July 29-30 policy meeting, where rate expectations could determine whether the metal finds support or extends losses.

Gold's 121% Rally Faces Historical Precedent

Over the past five years, gold has appreciated 121.28%, compared with the S&P 500's 73.62% return over the same period, according to TwelveData. The metal crossed the $3,000 threshold in March 2025 and peaked at $5,597.23 on Jan. 29, 2026 — a record high. Since then, it has retreated 28.3% from that peak, placing the current drawdown within striking distance of the 50% correction threshold that BofA's historical analysis flags as typical for gold bear markets.

Gold is down 7.41% from one month ago and has posted a six-month return of negative 12.64%, according to COMEX data. The year-to-date decline stands at 7.06%.

Phased Buying Strategy at $3,450-$3,250

BofA's strategists proposed a phased buying strategy, recommending investors complete full allocation only when gold prices fall into the $3,450-$3,250 range. The $3,315 target sits near the midpoint of that zone. For context, gold at $3,315 would represent a 40.8% decline from the January 2026 all-time high of $5,597.23 — still short of the 50% corrections seen in 1980 and 2011 but approaching that threshold.

The bearish call from one of Wall Street's largest banks could accelerate institutional rebalancing away from gold, particularly if the metal breaches the $3,450 support level. Gold mining stocks, which typically amplify moves in the underlying metal, face additional pressure if the downtrend continues toward BofA's target.

This article is for informational purposes only and does not constitute investment advice.