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Investing.com -- The rally in precious metals is no longer just about gold, as “silver and platinum close the gap to gold prices,” according to Bank of America (NYSE:BAC).
The market for precious metals is broadening, the bank said in a note Friday.
While gold hit an all-time high of $3,500/oz earlier this year, other metals lagged behind.
However, “the gold:silver ratio overshot in April and May, trading above 100,” and that imbalance is now said to be narrowing.
BofA maintains a $40/oz silver price target for the fourth quarter, noting, “a rebound in industrial demand would give us more confidence in our objective.”
For platinum, Bank of America sees “a platinum deficit this year,” supported by “lower South African production, a rebound of Chinese platinum imports and scope for higher jewellery demand.”
Prior to the rally on Friday, the bank noted that gold itself had stabilised after the recent peak.
“Investment demand in the yellow metal increased by a solid 20% YoY in 1Q25, but jewellery demand proved very price elastic and dropped by 19% YoY,” wrote BofA.
They added that as concerns tied to Liberation Day faded, ETFs saw liquidations, yet “buying has stabilised as of late, given ongoing concerns over the US fiscal deficit and USD weakness.”
Investor exposure to gold is also not seen as excessive.
“We estimate that investors have allocated 3.5% of their portfolios... still short of the all-time highs in 2011.” Central banks, meanwhile, have upped their holdings, now “equivalent to just under 18% of outstanding US public debt.”
Looking ahead, BofA believes “rates volatility and a weaker USD should then keep gold supported,” and sees a path for the metal to reach $4,000/oz within the next 12 months.
