Gold "Bull" Report: Why Gold is Expected to Reach $8,900 by the End of 2030?

Original text: In Gold We Trust , Incrementum

Compiled/edited by Yuliya, PANews

As the global political and economic order continues to turmoil, gold is returning to the center stage of the capital market. The 2025 annual report "In Gold We Trust" released by gold investment company Incrementum pointed out that the world is currently undergoing a new round of financial reconstruction, and gold, as a currency asset with no counterparty risk and non-inflation, has become increasingly strategically significant. From the deindustrialization and out-of-control fiscal deficits in the United States, to the rise of non-state credit assets such as Bitcoin, to the large-scale gold purchases by central banks, these trends together constitute the background of the "Big Long" pattern. This report analyzes the trend of the gold market, future expectations, the role of crypto assets in the new order, and potential risks such as structural inflation and dollar depreciation, aiming to provide investors with a long-term and stable gold investment framework.

Gold fever: From the fringe back to the mainstream

The report likens the current gold bull market to the opposite of the movie The Big Short: strategic investments in gold will deliver impressive returns amid the restructuring of the global financial and monetary systems. To quote Richard Russell: "There is no craze like the gold craze."

Gold has long been marginalized in the Western financial system, considered both to be a lack of yield and an outdated safe-haven instrument. But in recent years, the situation has begun to change.

Just like the financial bubble depicted in The Big Short, the gold market is also undergoing a transformation from the periphery to the core. This trend, known as the "Big Long," is a symbol of the long-term bull market in gold and also reveals the capital market's reassessment of systemic risks. In the current financial environment, investors face many key issues:

• Do sovereign bonds of the United States, Germany and other countries still have a safe-haven function?
• Has the dollar hegemony come to an end?
• Is the valuation of “MAG 7” too high?
• Is gold too expensive?

The traditional view is that gold prices are already high and have little room to rise. However, the report suggests that, on the contrary, we are currently in the middle of the gold bull market, not the end.

Gold Market Status

According to Dow Theory, a complete bull market can be divided into three stages: accumulation stage, public participation stage and frenzy stage. Gold is currently in the second stage, the "public participation stage". The typical characteristics of this stage include:

• Media coverage becomes increasingly optimistic
• Speculative interest and trading volumes rise
• New financial products are launched
• Analysts raise price targets

In the past five years, the global gold price has risen by 92%, while the actual purchasing power of the US dollar against gold has fallen by nearly 50%. According to the "Golden Decade" prediction put forward in the 2020 "In Gold We Trust" report, the current gold price trend is close to the inflation scenario path, which is much higher than the baseline scenario.

Data shows that gold hit 43 all-time highs in US dollar terms last year, second only to 57 in 1979, and this year has hit 22 new highs as of April 30. Although it has broken through the $3,000 mark, this round of gains is still mild compared to the historical gold bull market.

Gold is breaking through the absolute price, and also forming a technical breakthrough at the relative level (such as compared with stocks), which means that the strong pattern of gold relative to traditional assets has been established. For investors who have already invested in gold, it is a wise choice to continue holding, and for novices, it is still attractive to enter the market at present.

Although gold is a non-productive asset that does not pay dividends, it often outperforms income-generating assets such as stocks and bonds at key market stages. Investors should give due consideration to the role of gold in asset allocation.

It is important to note that historical data shows that gold prices may experience a 20% to 40% correction during a bull market. For example, the price volatility after April 2 is a reminder, although gold quickly recovered and hit a new high afterwards. In particular, silver and mining stocks, etc., their corrections are usually larger. Therefore, investors need to maintain a consistent risk management strategy to cope with market fluctuations.

New 60/40 Portfolio

The report proposes a new 60/40 portfolio concept, which is a rethinking of the traditional 60% stock/40% bond allocation. The new asset allocation is as follows:

• Stocks: 45%
• Bonds: 15%
• Safe-haven gold: 15%
• Performance gold: 10%
• Commodities: 10%
• Bitcoin: 5%

This new portfolio reflects the author's view on the current market environment, especially the concern about the loss of trust in traditional safe-haven assets such as government bonds. The report believes that a distinction should be made between safe-haven gold and performance gold, among which performance gold includes silver, mining stocks and commodities, which are considered to have great potential in the coming years.

Key factors affecting gold

Geopolitical realignment

The global geopolitical landscape is being reorganized at an accelerated pace, which is good for gold. The report cites Zoltan Pozsar's "Bretton Woods III" article published in 2022, pointing out that the world is moving from "the Bretton Woods era, which was backed by gold, to Bretton Woods II, which was backed by internal currency (U.S. Treasuries with unhedgeable confiscation risk), to Bretton Woods III, which is backed by external currency (gold and other commodities). "

Gold has three major advantages as an anchor for the new monetary order:

• Gold is neutral and does not belong to any country or political party, so it can be a unifying element in a multipolar world.
• Gold has no counterparty risk and is pure property. Countries can easily address confiscation risks by storing gold within their borders.
• Gold is highly liquid, with an average daily trading volume of more than $229 billion in 2024, and research by the London Bullion Market Association (LBMA) shows that gold is sometimes more liquid than government bonds

The impact of Trump’s policies

Trump's return to the White House has initiated a profound restructuring of the U.S. and global economies. Trump's majorities in the Senate and House of Representatives, coupled with a Republican-dominated Supreme Court, give him enormous political power. His policy directions include:

1. Solve the problem of excessive government debt:

• The DOGE (Department Optimization and Government Efficiency) program initially hoped to save $1 trillion a year, equivalent to about 15% of Washington's spending.
• Musk has recently lowered his expectations significantly, now mentioning a potential savings of $155 billion
• The United States now pays more than $1 trillion a year in interest on its national debt, more than its generous defense budget

2. Trade policy reform:

• The new tariffs announced on April 2, "Emancipation Day," raised the average U.S. tariff to nearly 30%, significantly higher than the approximately 20% during the Smoot-Hawley Tariff Act of 1930.
• OECD data shows that the United States is about three times more dependent on Chinese inputs than China is on the United States, which, given that China's manufacturing base is also three times that of the United States, suggests that China is in a better position in this conflict.

3. US dollar policy:

• Trump's team believes that the high dollar is one of the main reasons for the deindustrialization of the United States and plans to significantly devalue the dollar
• At the same time, they want to maintain the dollar's position as the undisputed global reserve, transaction and reserve currency
• Trump has threatened to impose 100% tariffs on countries that want to replace the dollar as a trading currency

These policies could lead to a slowdown or even recession in the U.S. economy, which has already begun to contract according to the GDPNow indicator. If this trend continues, the Fed will face greater pressure to ease monetary policy more aggressively than currently priced in.

Changes in European Monetary Policy

The report also points to a 180-degree turn in fiscal policy in Europe, especially in Germany. Friedrich Merz (CDU), expected to become Germany's next chancellor, proposes to exempt defense spending exceeding 1% of GDP from debt rules and to create a 500 billion euro debt financing program for infrastructure and climate protection. Forecasts show that Germany's national debt will rise from 60% of GDP to 90%.

This marks a historic moment in Germany: the official abandonment of fiscal conservatism under the conservative CDU/CSU leadership. The report describes this change as a "monetary climate change." German government bonds reacted sharply to this, experiencing their largest one-day move in 35 years after the announcement.

Central bank demand

Central bank demand is a key pillar of the "bullish bull market". The central bank has been a net buyer in the gold market since 2009, a trend that has accelerated significantly since the freezing of Russia's currency reserves in February 2022. For three consecutive years, the central bank has added more than 1,000 tons of gold reserves, achieving a special "hat trick".

According to the World Gold Council (WGC), global gold reserves reached 36,252 tons by February 2025. In 2024, gold's share of currency reserves reached 22%, the highest level since 1997 and more than double the low of about 9% in 2016. However, it is still a long way from the historical peak of more than 70% in 1980.

Asian central banks account for the majority of these purchases, but Poland becomes the largest buyer in 2024. It is worth noting that despite China's large purchases in recent years, its share of official gold reserves is only 6.5%. In contrast, the United States, Germany, France and Italy hold more than 70% of their reserves in gold. Russia, on the other hand, increased its share from 8% to 34% between 2014 and the first quarter of 2025.

In its research report, Goldman Sachs assumes that China will continue to buy gold at a rate of about 40 tons per month, which means that the demand of the Chinese central bank will be close to 500 tons per year, equivalent to nearly half of the total central bank demand in the past three years.

Fiat currencies continue to depreciate

The report emphasizes gold's monetary function: Unlike fiat currencies, the gold supply cannot be expanded arbitrarily. Since 1900, the U.S. population has grown 4.5 times (from 76 million to 342 million), while the M2 money supply has grown 2,333 times (from $9 billion to $21 trillion) and more than 500 times per capita (from $118 to over $60,000). The report compares this to "the muscle expansion of an athlete on steroids - impressive in appearance, but structurally fragile."

Money supply growth is a key long-term driver of gold prices. In G20 countries, M2 has grown at an average annual rate of 7.4%. Money supply is now growing again after three years of sometimes negative growth. Citing Larry Leppard's book "The Big Print", the report argues that money supply growth will accelerate significantly, which will be another catalyst for the "big bull".

Gold as portfolio insurance

Gold outperforms during recessions and stock market bear markets. The report analyzes 16 bear markets from 1929 to 2025, of which gold outperformed the S&P 500 in 15 of them, with an average relative performance of +42.55%.

The report likens gold to the Italian defensive tactic of "catenaccio" in football, with the defensive reliability of Giorgio Chiellini and the security in front of goal of Gianluigi Buffon. When other investments fluctuate, gold stabilizes the portfolio with predictable resilience.

Shadow Gold Price

The report retains the concept of the "shadow gold price" (SGP), which is the theoretical gold price if the base money supply was fully backed by gold. This is how the Bretton Woods Agreement calculated the exchange rate between the dollar and gold: the dollar monetary base divided by the US gold holdings.

Calculated according to current market prices:

• If USD M0 is fully backed by gold, the gold price would need to reach $21,416
• If Eurozone M0 were fully backed by gold, the gold price would need to be around 13,500 euros
• If US M2 is fully backed by gold, the gold price would need to reach $82,223
• If Swiss M2 were fully backed by gold, the gold price would need to reach CHF 29,101

Historically, partial coverage has been the norm:

• The Federal Reserve Act of 1914 required a minimum gold coverage ratio of 40%. To meet this requirement, the gold price would have to rise to $8,566.
• From 1945 to 1971, the requirement is 25% coverage, and the current corresponding M0 shadow gold price is $5,354

The international shadow gold price shows what the gold price would be if the money supply (M0 or M2) of the major currency areas (US, Eurozone, UK, Switzerland, Japan and China) was covered by central bank gold reserves in proportion to their share of global GDP:

• M0 25% coverage: $5,100
• M0 40% coverage: $8,160
• M0 100% coverage: $20,401
• M2 25% coverage: $57,965
• M2 40% coverage: $92,744
• M2 100% coverage: $231,860

Currently, the gold coverage of the US monetary base is only 14.5%, meaning that only 14.5 cents of every dollar is made up of gold, and the remaining 85.5% is "air".

During the gold bull run of the 2000s, gold coverage of the monetary base increased from 10.8% to 29.7%. To achieve similar coverage, the gold price would need to almost double to over $6,000. Historically, gold coverage has been above 100% in the 1930s, 1940s, and 1980s. The 1980 record of 131% would be equivalent to a current gold price of about $30,000.

Gold Price Prediction

The Incrementum gold price model forecasts for 2020:

• Base case : Gold price around $4,800 by end-2030, with a mid-term target of $2,942 by end-2025
• Inflation scenario : Gold price around $8,900 by end-2030, with a medium-term target of $4,080 by end-2025

Currently, the gold price has exceeded the mid-term target of $2,942 in the base case at the end of 2025. The report believes that by the end of this decade, the gold price is likely to be between the two scenarios, depending on the extent of inflation in the next five years.

Inflation risk analysis

The report warns that the possibility of a second wave of inflation, like the one in the 1970s, should not be ruled out. If the inflation trend in the 1970s is a guide, the similarities between current developments are striking.

In the coming months, the report still sees a mainly deflationary trend, especially due to the sharp drop in oil prices. The significant appreciation of the currencies of the leading industrial countries against the US dollar further reinforces the deflationary effect in these countries.

However, this does not mean that inflation risks have been eliminated. Although the recession and the plunge in capital markets have deflationary or even disinflationary effects, the response will be highly inflationary. A strong response from the Fed seems to be only a matter of time. Possible measures include yield curve control, a new round of QE or QQE, financial repression, further fiscal stimulus, and even MMT or helicopter money.

The quantitative analysis of the report shows that gold, silver and mining stocks have performed extremely well in a stagflation environment. During the stagflation period calculated in the report, the average annual real compound growth rate of gold was 7.7%, silver was 28.6%, and BGMI (Barron's Gold Mining Index) was 3.4%, while in the 1970s, these figures were 32.8%, 33.1% and 21.2% respectively.

Investment opportunities in "performance gold"

Even as gold slowly returns to the spotlight, a massive gold rush by Western financial investors is still far away: Gold ETFs recorded $21.1 billion in inflows in the first quarter of 2025, the second highest in history. However, due to the sharp rise in gold prices, this inflow was only the tenth largest quarter in history in terms of tons.

At the same time, the inflow of funds into gold ETFs is still much lower than that of stock and bond ETFs, with the inflow of funds into stock ETFs being 8 times that of gold ETFs, while the inflow of funds into fixed income ETFs is 5 times that of gold ETFs.

Looking back at the performance in the 1970s and 2000s, silver and mining stocks have great catch-up potential in the current decade. Market dynamics show that gold usually leads the rally, while silver, mining stocks and commodities follow later, similar to a relay race pattern.

Bitcoin

Bitcoin may benefit from the current reorganization of the world order. Against the backdrop of rising geopolitical tensions, the advantages of Bitcoin as a decentralized cryptocurrency seem obvious. Due to its independence from state control and cross-border transaction capabilities, Bitcoin does provide an alternative to traditional currencies. With the passage of the Strategic Bitcoin Reserve Act, the United States has also entered the race for digital gold at the national level.

As of the end of April, the market value of all gold ever mined was about $23 trillion (217,465 tons at $3,288 per ounce). Bitcoin’s market value was about $1.9 trillion (at about $94,200), which is about 8% of gold’s market value.

The report argues that Bitcoin could reach 50% of gold’s market value by the end of 2030. If a conservative gold price target of around $4,800 is assumed, Bitcoin prices would need to rise to around $900,000 to reach 50% of gold’s market value. This may be ambitious, but ultimately consistent with the historical performance of both assets.

The report points out that gold having a competitor in the non-inflationary asset space is not necessarily a disadvantage. According to the motto of "competition stimulates business", more and more investors may realize that a combination of gold and Bitcoin is better than their respective individual investments after risk adjustment. The report's credo for many years has been: "Gold is stability, Bitcoin is convexity."

Comparison of key gold market indicators in 1980, 2011 and today

The report compares various macro and market key indicators from 1980, 2011 and now, confirming the "bullish" thesis: gold prices still have room to rise. Of particular note is the current significantly higher US dollar index - about 100 points, far higher than the level of gold's last secular high.

Potential risk factors

Although the long-term upward trend is intact, the report points to the following factors that could lead to a short-term correction:

• Central banks as a key risk : An unexpected drop in central bank demand from the current average of 250 tonnes per quarter could reduce structural demand
• Investor reductions and positions : The broad sell-off after April Liberation Day showed how quickly speculative positions could be reduced.
• Declining geopolitical premium : An agreement on the Ukraine war, a easing of tensions in the Middle East, or a quick end to trade wars, especially with China, would significantly reduce the corresponding geopolitical premium
• Stronger-than-expected U.S. economy : A strong U.S. economy could prompt the Fed to tighten interest rates
• High technical and sentiment-driven risk : Sentiment is bullish and positions are extreme in some cases
• Dollar strength : USD is oversold in the short term, sentiment is extremely negative

The report believes that the short-term market situation is tense, and the gold price may fall back to about $2,800 in the short term, or even go sideways. This adjustment may be part of the bull market consolidation process and will not pose a threat to the medium- and long-term upward trend of gold.

in conclusion

The report believes that the gold bull market is not over yet and is in the middle of the public participation stage. Gold is transforming from being seen as an outdated relic to a key asset in the portfolio, providing both defensive stability and offensive potential. The report compares gold to the "Michael Jordan" of assets, with stable defense and powerful offense - a true game changer.

Gold's long-term rally is based on several mutually reinforcing pillars:

• The inevitable restructuring of the global financial and monetary system in the face of profound political and economic turmoil
• The inflationary bias of governments and central banks – monetary climate change
• The rise of regional economies with an affinity for gold, particularly in Asia and the Arab world
• Capital shifts away from US assets (dollars, US stocks, US Treasuries), which have stolen gold’s limelight for years
• Expected excess returns of "performance gold" (i.e. silver, mining stocks and commodities)

The report states that the current gold price rally may not only be a reflection of the crisis, but could also be the first harbinger of a "Golden Swan Moment": a rare but extremely positive signal for gold amid the maelstrom of global turmoil. As the existing monetary system increasingly loses credibility, it becomes increasingly likely that gold will regain its traditional role as a monetary asset, perhaps in the form of a supranational settlement asset - not as an instrument of political power, but as a neutral, debt-free basis for trade, exchange and trust.

As traditional safe-haven assets such as US or German government bonds lose trust and weaken their stabilizing function, gold is returning to the core of long-term investment strategies. In times of geopolitical and economic turmoil, gold has once again proved itself to be a reliable safe-haven asset.