BOA: The Path to $3,500 Goes Through China Insurers
BOA's Gold Trading Primer Breakdown
Housekeeping: Good Morning. To cut to the chase on the title topic, go right to the subtitle: “We remain constructive gold” section
Intro:
Yesterday in the Morning Rundown show Sneak Preview; the attached piece was introduced in cursory fashion. From that podcast:“Bank of America has a thorough report entitled Gold Primer. And that report is very educationally biased.”
The kicker in the report was the details governing Gold’s potential path to $3,500; eclipsing CITI’s $3400 soft-target raise reported just days earlier here.
The bottom line: to get gold to an average of $3,000/oz this year, investment demand needs to increase by just 1%. For gold to hit $3,500/oz, investment demand needs to rise by 10%. That’s a lot, but not impossible.
The Bank then goes on to expain how that could happen
The report is plain spoken and clear. The audience intended is the bank’s client base on their massive equity managed-money side who seek/need exposure to Precious metals now (i.e. Hartnett’s Flow show core to whom he has been suggesting buy bullion for almost a year).
The proximate catalyst for this report was likely the China insurance announcement prompting the Bank to put $3500 on their radar.
Open Q & A on Topic
This type of analysis, like a good textbook, frequently brings second order questions from readers. Therefore, Goldfix will open a new chat/thread (like a comment section with ability to insert visual aides) on this post to answer any and ideally all questions on the report over the next 3 days. 1
Look for a link emailed later on which will also be placed in the post comment section for premium subscribers to join.
A Word About Reading BOA’s Layout
The BOA report style typically looks like a narrative, but reads like a textbook this is how we read them to conserve time
The first 4 paragraphs are their Executive Summary—— a long “key points” sectionEverything after that gives details on each paragragh in that ExecSum—— but not necesarily in the order of the Key Points!The “rest” contains explanations, historical examples, deep dives, supporting data/charts, and the bank’s price outlook explained in much more detail with overlapping writing.
We read it like a newspaper. After reading the 4 keypoints (front page) like a table of contents, we do a key-word search on topics of interest. Might better help locate the things you want to read first. 2
Enjoy