"Indeed, rising funding needs, debt servicing costs and concerns over the sustainability of fiscal policy may well mean that gold prices could increase, if rates move up."

The BofA analysis, authored by commodity strategist Michael Widmer, says rising US debt levels could be adding to gold's shine. The US is not the only net borrower among the countries of the world, but with its national debt now exceeding 120 percent of gross domestic product, investors may begin to question the security of Treasury bonds.

Bank of America warns that gold may be the last true safe haven as the U.S. national debt climbs to unprecedented levels, casting doubt on the stability of traditional assets like Treasury bonds.