BofA's Hartnett: Rising U.S. Fiscal Risks, Recommends Buying Gold
nashnova research
BofA strategist Michael Hartnett this week told clients to buy gold, arguing that a fresh fiscal "chicken game" looming in early next year, combined with still-expanding U.S. debt, will drive gold higher on safe-haven demand and dollar-credit anxiety.
Why is BofA calling for gold now?
Strategist Hartnett issued a clear directive this week: buy gold.
His core thesis rests on a coming fiscal "chicken game" — a political standoff where neither side blinks first.
This means → BofA is not trading gold on short-term technicals; it is betting on a political risk event the market has not fully priced in.
How stretched are U.S. finances?
Measured on a trailing 12-month run rate, total U.S. debt continues to expand.
In plain terms = Washington is spending at an unslowing pace, borrowing more with no sign of a brake.
This reflects a deeper problem: the erosion of fiscal discipline is itself undermining the dollar's credit foundation.
Why does gold benefit from this setup?
Debt-ceiling disputes have historically triggered a repricing of U.S. credit risk.
Gold draws on two forces simultaneously: rising safe-haven demand + deepening dollar-credit anxiety.
This means → gold's role here is not just "chaos hedge" — it is a discount ticket on the dollar's credit system itself.
Is this call reliable — where is the risk?
Hartnett anchors the trade window to fiscal negotiations in early next year — a long timeline with many variables.
The outcome hinges on two factors: how Congress actually negotiates and how markets reprice debt sustainability.
Put simply = if Congress reaches a deal faster than expected and risk sentiment rebounds, gold's rally thesis weakens.
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