Gold Targets $5,100 Record as BofA Warns of US Economic Stagnation

XAU/USD continued its unrelenting rally on Tuesday, trading near the psychological $5,100 all-time high as a “perfect storm” of macro headwinds batters the Greenback. The precious metal has now logged seven consecutive days of gains, driven by a structural shift in global asset allocation and deteriorating US economic data.

Key Market Data

• Gold (XAU/USD): Trading near record $5,100 highs.
• Silver (XAG/USD): Recovering to $109.00.
• US GDP Impact: Potential 0.5% to 1.5% hit in Q1 2026.
• Euro (EUR/USD): Firm around 1.1870.

Asset Managers Flee the Dollar

A report from Europes largest asset manager highlights a growing trend of “de-dollarization” among institutional investors. Citing concerns over US fiscal deficits, political isolationism, and unpredictable Federal Reserve policy, the firm confirmed it has been aggressively rotating capital into Gold for over two years. This institutional support suggests the current rally is driven by long-term hedging rather than speculative fervor.

Complementing the bullion rally, Silver (XAG/USD) has recovered recent losses to trade near $109.00, benefitting from the broader precious metals tailwind.

BofA: “Zero Growth” Risk for US Economy

Adding pressure to the Dollar Index (DXY), Bank of America released a startling economic alert regarding extreme weather conditions sweeping across half the United States. The bank projects this could slash 0.5% to 1.5% off Q1 2026 GDP, effectively stalling the US economy to near-zero growth.

Market Implication

With the Euro trading firmly around 1.1870 against the Dollar, the divergence between a stagnating US outlook and resilient commodities demand is widening. While the EUR/USD maintains a bullish technical bias within an ascending channel, the primary beneficiary of the Dollar's weakness remains the precious metals complex.

Technicals

• EUR/USD: Maintains a bullish technical bias within an ascending channel.