You have heard that gold reaches record heights. Not quite, Bofa says

This year, gold has increased by major thresholds, because traditional coverage against inflation and macroeconomic uncertainty has been propelled by a preponderance of the two. On September 2, Gold exceeded $ 3,500 / Oz, climbing more at $ 3,600 / OZ on Monday following the data from disappointing American jobs for August, which increased bets on the easier monetary policy. The Bofa’s basic products team is “bullish”, they say, now providing for the average quarterly price reaching $ 4,000 / OZ in the second quarter of 2026, the cash price is already up 4.1% of $ 3,589 / oz.

Rob Haworth, main investment strategist at Us Bank Wealth Management, said Fortune In March, this gold can be a good investment for some, but it is not exactly liquid. “You do not send gold to buy your Domino pizza,” he said, adding that the gold gathering in recent years has been motivated by central banks buying precious metal as the US dollar is weakening and countries like China are looking for alternatives.

Here’s why Bank of America says that the prospect is important to assess the Gold record, and it depends on how you look at him.

Sectoral market capitalization double peaks, but …

The total market capitalization of the global gold sector has reached just over $ 550 billion, almost double the peaks observed in 2011 and 2020 (331 to 334 billion dollars), more than 8 times the 2016 low cycle ($ 70 billion), and more than 3 times the recent low cycle of $ 170 billion in 2022. does not only reflect price gains. But also the interests of investors increased by inflation and pressures of the costs of the sector.

However, when considered a part of the global market for total actions, the ascent of Gold seems less dramatic and it is “well below” of its previous summits, said the basic products team. The sector now amounts to 0.39% of the world market capitalization, corresponding to the peak of 2020, but also well below 0.71% of 2011. If the sector returned to this percentage of 2011, this would involve market capitalization of almost $ 990 billion – an increase potential only if the cycle continues long enough.

Place to run

Despite high metal prices, gold actions are not negotiated with historical assessments. The multiple EV / EBITDA in the sector of the sector in the next month (NTM) is 11x, well below peak 2020 of 15.4x. The price of the price at Net-Net (P / NAV) for the sector is based at 1.88x, compared to 2.27x in 2020 and 2.19x in 2011. Adjusted for current gold prices, the multiple sectorals suggest even more upwards, with NTM EV / EBITDA at 11.7x and p / nav at 1.39x.

Gold actions responded to the price rally, but not evenly. The main indices such as the Gold Gold Global S&P / TSX index (+ 5.5%WOW), the Philadelphia Gold and Silver Index (+ 4.8%) and the NYSE ARCA Gold Bugs (+ 4.1%) index all jumped alongside Bullion’s Breakout. Year at an appointment, Fresnillo is the best performer, climbing more than 268%, highlighting the disparate yields of the sector.

Bofa’s search indicates a place for growth – if the current trends in monetary policy, inflation and the feeling of investors persist. However, the gold sector remains a small group of the pie with global actions, with evaluations of actions still well below the historical summits. For market observers, the price of the rise in gold is only part of history; The fundamentals suggest that this boom is not yet a replay of previous peaks, and the “record heights” should be considered in the context.

For this story, Fortune Used a generative AI to help an initial project. An editor checked the accuracy of the information before the publication.

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