New Opportunities in the Gold Market: Returning from the Margins to the Mainstream

The global political and economic landscape is undergoing profound changes, with gold returning to the center of investors' attention. As a currency asset with no counterparty risk and immunity to inflation, the strategic significance of gold is increasingly prominent. From the deindustrialization and uncontrolled fiscal deficits in the United States to the rise of non-state credit assets like Bitcoin, and the large-scale gold purchases by central banks, various signs indicate that a "gold bull market" pattern is forming.

Current Status of the Gold Market

Currently, gold is in the "public participation phase" of a bull market, exhibiting the following characteristics:

• Media reports are becoming optimistic
• Speculative interest and trading volume are rising
• New financial products launched
• Analysts raise price target

In the past five years, global gold prices have risen by 92%, while the actual purchasing power of the US dollar against gold has decreased by nearly 50%. Last year, gold reached 43 historical highs when priced in US dollars, and by the end of April this year, it has already set 22 new highs. Although it has surpassed the $3000 mark, this round of increase remains moderate compared to historical bull markets.

Key Factors Affecting Gold

Geopolitical Restructuring

The global geopolitical landscape is undergoing a rapid restructuring, favorable to gold. The world is transitioning from a "dollar-centric" system to a new Bretton Woods system supported by "external currencies ( gold and other commodities )."

Trump policies

After Trump returned to the White House, he initiated a profound restructuring of the American and global economy, with key policy directions including:

1. Solve the problem of excessive government debt
2. Trade policy reform, significantly increase tariffs
3. Dollar Policy: Plan to significantly devalue the dollar while maintaining its status as a global reserve currency.

These policies may lead to a slowdown in the U.S. economy, or even a recession.

Changes in European Monetary Policy

The fiscal policies of Germany and other European countries have undergone a 180-degree shift, abandoning fiscal conservatism. It is expected that Germany's national debt will rise from 60% of GDP to 90%.

central bank demand

Central bank demand is the key pillar for the "big bulls." Since 2009, central banks have been net buyers in the gold market, and this trend significantly accelerated after 2022. Currently, global gold reserves have reached 36,252 tons, and the proportion of gold in monetary reserves has risen to 22%, the highest since 1997.

The fiat currency continues to depreciate

Since 1900, the M2 money supply in the United States has increased by 2,333 times, far exceeding population growth. The growth of the money supply is a long-term key driver of gold prices.

Gold Price Prediction

Incrementum Gold Price Model Prediction:

• Basic scenario: By the end of 2030, the gold price is approximately $4,800.
• Inflation scenario: By the end of 2030, the price of gold is around $8,900.

The current gold price has exceeded the mid-term target of $2,942 for the baseline scenario by the end of 2025.

Investment Opportunities in "Performance Gold"

Looking back at history, silver and mining stocks have significant catching-up potential in the current decade. Market dynamics show that gold usually leads the uptrend, followed by silver, mining stocks, and commodities.

Bitcoin

Bitcoin could benefit from the current reorganization of the world order. The report suggests that by the end of 2030, Bitcoin could reach 50% of gold's market value. If the target price for gold is $4,800, Bitcoin's price would need to rise to about $900,000 to achieve 50% of gold's market value.

Conclusion

The gold bull market has not yet ended and is currently in the mid-stage of public participation. Gold is transitioning from being seen as an outdated relic to a key asset in investment portfolios, providing both defensive stability and offensive potential. As traditional safe-haven assets lose trust, gold is re-emerging as the core of long-term investment strategies.