Bank of America Spots Value in Gold Miners Despite Cutting 2026 Price Forecast

Bank of America analysts have cut their 2026 average gold price forecast by 14% to $4,360 per ounce, citing expectations of three Federal Reserve rate hikes this year. Nevertheless, the bank stays bullish on gold over the longer term and sees compelling value in gold mining equities.

Higher rates are expected to drive capital rotation into overlooked sectors such as mining. Gold miners’ free cash flow has risen tenfold since 2020 while long-term debt halved relative to equity; earnings yields stand at 12%, the highest of any sector and the cheapest versus the S&P 500 in two decades.

Mining shares trade at a 19% discount to net asset value and offer portfolio diversification with low correlations to equities (0.3) and fixed income (0.2) over the past ten years.