Bank of America says the nation’s $35.751 trillion debt will rise to “unprecedented levels” in the coming years, according to a new report.
The banks’ analysts just sent a note to their clients saying that the US will be forced to pay increasing interest on its debt as spending picks up again, Investing.com reports.
And while the Fed has started cutting interest rates, note lawmakers are still looking to increase spending.
Rising fiscal pressures are likely to boost gold and make it an “attractive asset” for investors, strategists say.
Specifically, the bank points to IMF figures that predict that future spending on climate, defense and “demographic challenges” could increase US spending by as much as 8% of GDP by 2030.
The bank says the target for the precious metal is $3,000 per ounce.
While BofA is bullish, the bank warns that gold prices could be capped in the near term as investors weigh the impact of a slower pace of Federal Reserve rate cuts and the possibility of a winding no-landing scenario for weigh the economy.
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