Analysis of Gold Investment Prospects: Gold Prices May Reach $8,900 by 2030

The global political and economic order is in continuous turmoil, and gold is returning to the core of the capital market. The "We Trust Gold" report for 2025 published by the gold investment company Incrementum points out that the world is currently experiencing a new round of financial reconstruction, highlighting the strategic significance of gold as a no-counterparty risk, non-inflationary monetary asset. The report analyzes the trends in the gold market, future expectations, the role of crypto assets, as well as potential risks such as structural inflation and dollar depreciation, providing investors with a long-term and robust framework for gold investment.

Current Status of the Gold Market

According to Dow theory, a complete bull market is divided into three phases: accumulation phase, public participation phase, and mania phase. Currently, gold is in the second phase "public participation phase". The characteristics include:

• Media reports are becoming increasingly optimistic
• Speculative interest and trading volume are rising
• New financial products are being launched
• Analyst raises price target

In the past five years, global gold prices have risen by 92%, while the actual purchasing power of the dollar against gold has decreased by nearly 50%. Last year, gold set 43 historical highs priced in dollars, and as of April 30 this year, it has set 22 new highs. Although it has broken through the $3000 mark, this round of increase is still moderate compared to historical bull markets.

Gold is breaking through absolute prices, and at the relative level (, it has formed a technical breakthrough compared to stocks ), indicating that a strong pattern of gold relative to traditional assets has been established. For investors who have already invested in gold, it is wise to continue holding; for newcomers, the current entry point remains attractive.

It should be noted that historical data shows that during a bull market, gold prices may experience a correction of 20%-40%. Investors need to maintain a consistent risk management strategy to cope with market fluctuations.

Key Factors Influencing Gold

Geopolitical Restructuring

The global geopolitical landscape is accelerating its restructuring, which is favorable for gold. The world is transitioning from "the Bretton Woods era supported by gold, to Bretton Woods II supported by internal currencies, and then to Bretton Woods III supported by external currencies (, gold and other commodities )."

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

1. Neutrality can become a unifying element in a multipolar world.
2. No counterparty risk
3. High liquidity, with an average daily trading volume exceeding $229 billion in 2024.

US policy changes

The policy direction of the Trump administration includes:

1. Address the issue of government over-indebtedness
2. Trade Policy Reform: The new tariff policy will raise the average tariff in the United States to nearly 30%.
3. Dollar Policy: Plans to significantly devalue the dollar while maintaining its status as a global reserve currency.

These policies may lead to a slowdown or even recession in the U.S. economy, and the Federal Reserve may need to loosen monetary policy more aggressively than currently priced in.

Changes in European Monetary Policy

Germany's fiscal policy has undergone a 180-degree shift, with government debt expected to rise from 60% of GDP to 90%. This marks Germany's formal abandonment of fiscal conservatism, described as "monetary climate change."

central bank demand

Central bank demand is a key pillar for the "bull market". Since 2009, central banks have been net buyers of gold, significantly accelerating after the freezing of Russian currency reserves in February 2022. For three consecutive years, central banks have increased their gold reserves by over 1,000 tons.

As of February 2025, global gold reserves reached 36,252 tons. In 2024, gold accounted for 22% of currency reserves, the highest since 1997, more than double the low of about 9% in 2016.

Legal currency continues to depreciate

Since 1900, the U.S. population has increased by 4.5 times, the M2 money supply has grown by 2,333 times, and per capita has increased by over 500 times. The growth of money supply is a key long-term driver of gold prices. In G20 countries, the average annual growth rate of M2 is 7.4%.

Gold as a hedge for investment portfolios

During the 16 bear markets from 1929 to 2025, gold outperformed the S&P 500 in 15 instances, with an average relative performance of +42.55%.

Shadow Gold Price

The report retains the concept of "shadow gold price" (SGP), which refers to the theoretical gold price completely supported by the supply of base currency in gold. Current market price calculation:

• The M0 of the dollar is fully backed by gold, and the gold price needs to reach $21,416.
• The M0 of the Eurozone is fully backed by gold, and the gold price needs to reach approximately 13,500 euros.
• The US M2 is fully backed by gold, and the gold price needs to reach $82,223.
• The Swiss M2 is fully backed by gold, and the gold price needs to reach 29,101 Swiss francs.

The international shadow gold prices indicate that the monetary supply of major currency areas such as ( the United States, Eurozone, United Kingdom, Switzerland, Japan, and China ) is covered by central bank gold reserves in proportion to their share in global GDP.

• M0 25% Coverage: 5,100 USD
• 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 ratio of the US monetary base is only 14.5%. To reach the 29.7% coverage ratio of the gold bull market in the 2000s, the gold price would need to double to over $6,000.

Gold Price Prediction

Incrementum Gold Price Model Prediction:

• Basic scenario: By the end of 2030, the gold price is about $4,800, with a mid-term target of $2,942 by the end of 2025.
• Inflation scenario: Gold price expected to be around $8,900 by the end of 2030, mid-term target of $4,080 by the end of 2025.

Currently, the gold price has exceeded the mid-term target of $2,942 set for the end of 2025 in the baseline scenario. The report believes that by the end of this decade, the gold price is likely to fluctuate between two scenarios, depending on the level of inflation over the next five years.

Inflation Risk Analysis

The report warns that the possibility of a second wave of inflation, like in the 1970s, should not be ruled out. A significant deflationary trend is still observed in the coming months, particularly due to the sharp drop in oil prices. However, this does not mean that the inflation risk has been eliminated.

Quantitative analysis shows that in a stagflation environment, gold, silver, and mining stocks perform exceptionally well. During the stagflation period calculated in the report, the annualized real compound growth rate for gold was 7.7%, for silver it was 28.6%, and for BGMI it was 3.4%.

"Performance-based Gold" Investment Opportunities

Looking back at the performance of the 1970s and the 2000s, silver and mining stocks have significant catch-up potential in the current decade. Market dynamics show that gold typically leads the rally, followed by silver, mining stocks, and commodities, resembling a relay race.

Bitcoin

Bitcoin may benefit from the current restructuring of the world order. As of the end of April, the total market value of all mined gold is about $23 trillion, while the market value of Bitcoin is approximately $1.9 trillion, which is about 8% of the gold market value.

The report suggests that by the end of 2030, Bitcoin could reach 50% of gold's market value. Assuming a conservative gold price target of around $4,800, the price of Bitcoin would need to rise to about $900,000 to reach 50% of gold's market value.

Potential Risk Factors

Factors that may lead to short-term adjustments include:

• Central bank demand unexpectedly decreased
• Investors reduce positions and decrease holdings
• Decline in geopolitical premium
• The US economy is stronger than expected
• High-tech and emotion-driven risks
• The US dollar strengthens

The report suggests that in the short term, gold prices may pull back to around $2800, or even consolidate sideways. This adjustment may be part of the consolidation process of the bull market and will not pose a threat to the medium to long-term upward trend of gold.

Conclusion

The report believes that the gold bull market has not yet ended and is currently in the mid-stage of public participation. Gold has shifted from being seen as an outdated relic to a key asset in investment portfolios, providing both defensive stability and offensive potential.

The long-term rise of gold is based on several mutually reinforcing pillars:

• Restructuring of the global financial and monetary system
• Government and central bank inflation tendencies
• The economic rise of regions with an affinity for gold
• Capital is shifting from US assets
• "Performance Gold" expected excess returns

The recent rise in gold prices may be a precursor to a "golden swan moment": gold could regain its traditional role as a monetary asset in the form of a super-national settlement asset. As traditional safe-haven assets lose trust, gold is once again becoming the core of long-term investment strategies.