Bank of America Warns Oil Is the Biggest Headwind for Gold, Estimating Q4 at $4,000

Commodity analysts at Bank of America estimated in a note issued on September 30 that the average price of gold would reach around $4,000 per ounce in the fourth quarter of 2026, with the potential for a temporary dip toward $3,750, at a time when the bank identified oil as the metal's biggest near-term headwind.

The bank maintained its longer-term bullish forecast, seeing quarterly averages for 2027 remaining near $5,000 and the annual average for 2027 at around $4,800. It warned that a scenario in which oil rises to $150 per barrel—not its base case—could reduce the 2027 average to around $3,500. It noted that central banks, led by Turkey, sold about 60 tons of gold in the second quarter.

Estimate reductions were not limited to a single bank, as HSBC lowered its 2026 average by $70 to $4,490 and its 2027 average by $100 to $4,825, according to Tencent News citing Kitco. Conversely, Goldman Sachs maintained its prediction of $4,900 for December 2026, while UBS set a year-end target of $4,600.

London spot prices closed at $4,143.10, down about 0.82% for the day and roughly 3.31% over the week. The bank's link between oil and gold prices means that the yellow metal's trajectory could be influenced by any shift in energy prices—a factor of interest to Gulf economies that combine oil revenues and gold savings, making tracking the price per barrel part of reading the metal's price.

What do these terms mean?

Base scenario: The most likely estimate in a bank's note, contrasted with less probable alternative scenarios. Quarterly average: The average price of an asset over three months, used to mitigate the effect of daily volatility. Annual average: The average price over an entire year, adopted in long-term estimates. Net seller: An entity that has sold more from its reserves than it bought.