For years, the financial world has been debating the best and safest investments in uncertain times. For most conservative traders and investors, bonds are the obvious choice. However, for younger generations and tech-savvy individuals, Bitcoin is a better option. Despite financial difficulties and current global economic trends, gold remains the best option for Bank of America analysts.
According to Bank of America, gold remains strong whether interest rates fall or even if they rise. Interestingly, the bank is silent about Bitcoin's role in financial markets. However, many large U.S. banks are becoming friendlier, with Bank of America's Merrill Lynch and Wells Fargo offering Bitcoin ETFs to eligible customers.
🚨 Awesome: Bank of America Today: Gold is 'last safe haven' as Treasury faces risks from US Treasuries.
They recommend central banks and traders increase exposure 🍿#gold #silver #silver squeeze pic.twitter.com/XIp7aAYYrx— Making Gold Great Again (@MakeGoldGreat) October 17, 2024
Bank of America: Gold is a better hedge against inflation
Analysts at Bank of America say gold remains the leading choice in the current economic climate. The bank is bringing Bitcoin and blockchain into the conversation, but remains cautious. The bank added that while gold is a logical choice for investors and central banks, gold is a better hedge against inflation and highly volatile currencies.
Gold is also more expensive than Bitcoin as many expect cryptocurrencies could fall, especially with US PPI inflation reported at 1.8%, higher than the expected 1.6%. is also considered a good investment. A rise in the PPI means inflation is putting pressure on the economy, which could motivate the Federal Reserve to raise interest rates. With economic uncertainty still present, gold has become a reliable investment.
Gold expected to reach $3,000 level
Bank of America predicts that gold prices could reach the $3,000 level. This prediction is supported by the policies planned by two US presidential candidates, Donald Trump and Kamala Harris. Both candidates support fiscal expansion, which would increase spending.
The bank estimates spending could rise 7% to 8% annually by 2030, driven by candidates' pledges to support defense, climate and population policies. And if the market continues to take on more debt, it could increase market volatility and drive more investors into gold.
Image: Deutsche Digital Assets
Many central banks are also diversifying and increasing their foreign exchange reserves. Reserves have increased from 3% to 10% over the past decade and have recently seen increased demand from Western investors. In other words, Bank of America believes that gold is a better long-term, safer investment.
BoFA remains cautious about blockchain and Bitcoin
Like many financial institutions, Bank of America is slowly embracing the potential of blockchain. Bitcoin is seen as another alternative to gold as a hedge against inflation. Blockchain’s decentralization and limited supply make it an ideal investment vehicle.
With Bitcoin and altcoins growing in popularity, it's only a matter of time before leading banks like Bank of America incorporate them into their investment strategies.
Featured images from CryptoTab Browser, charts from TradingView
