Wall Street continues to envision a bull market in gold: looking towards $3000.

After the brilliant year of 2024, fund managers still see reasons to remain bullish on gold. Gold surged by 27% last year, reaching a historical high near $2800 per ounce, and also marked the largest annual increase since 2010. The three main factors driving the rise in gold prices are: massive purchases by global central banks, especially by the central banks of China and other emerging markets; the Fed cutting interest rates, making non-yielding gold more attractive; and gold playing its traditional role as a safe haven tool in geopolitical tensions. By 2025, these driving factors are expected to remain more or less unchanged. Investors are also preparing for Trump's second term and the potential impact of this new president on trade flows, inflation, and the global economy. This outlook continues to stimulate people to buy gold as a way to protect wealth and hedge against potential negative impacts. Greg Sharenow, portfolio manager at Pacific Investment Management Co. (PIMCO), stated that diversifying investments by buying gold is "a trend that will continue." Sharenow said, "We expect that major central banks and high-net-worth families will continue to find gold attractive." An extreme example is the US hedge fund Quantix Commodities, which holds 30% of gold, nearly double the weight of gold in the Bloomberg Commodity Index. Quantix executive Matt Schwab said that Quantix plans to maintain its positions this year, expecting the price of gold to rise to $3000 in 2025. Sell-side strategists at Wall Street banks are also optimistic. Overall, including JPMorgan Chase and Citigroup, the top ten Wall Street banks predict that the average gold price will rise by 8% this year, reaching $2860. Bank of America and JPMorgan Chase expect the gold price to reach $3000 by the end of this year, while UBS expects it to reach $2900. At the beginning of January, the spot gold trading price exceeded $2600 per ounce. Goldman Sachs analysts predict that if global central banks buy more gold than market expectations, the price of gold could rise to $3050. The institution also stated that if the Fed decides to cut interest rates only once this year, the price of gold may stagnate around $2900. However, Goldman's expectation of $2900 is higher than the average expectation on Wall Street. Certainly, since the US election on November 5th, the price of gold has been on a downtrend. In the market excitement triggered by Trump's victory, during the rebound of risk assets such as the US dollar, the stock market, and Bitcoin, gold fell. But in the long run, the possibility of new tariffs is believed to exacerbate trade tensions and may lead to a slowdown in economic growth. Economists and analysts believe that the measures proposed by Trump have exacerbated inflation, complicating the Fed's path to another rate cut this year. After the expected 25 basis point rate cut at the last meeting in 2024, Fed officials hinted on December 18 that they would only cut rates twice in 2025 and become more cautious about the pace of further easing. Darwei Kung, commodities director at DWS Group, said, "If trade relations worsen due to Trump's new policies, we may see a negative reaction in the stock market, and gold will be a good asset to hedge against such risks." He expects the gold price to rise to $2800 by the end of the year. For other parts of the world, the potential trade war with the US may prompt major central banks to accelerate their easing efforts. Aline Carnizelo, managing partner at Swiss company Frontier Commodities, said this scenario will boost the performance of gold, expecting the gold price to exceed $2800 this year. Patrick Fruzzetti, portfolio manager at New York's Rose Advisors, pointed out that the biggest difference now compared to when Trump first took office is the level of deficit spending. Data from the Congressional Budget Office (CBO) shows that US debt has risen from just under $17 trillion at the end of 2019 to around $28 trillion, and the US federal deficit is expected to exceed 6% of GDP in 2025. Fruzzetti, referring to the commitment of the new US government to control the federal deficit, said, "Actions speak louder than words. I won't reduce my gold positions until they show me a different situation." Hedge fund manager Jeff Muhlenkamp also pointed out that concerns about the US government's ability to repay debt may prevent some investors from putting their funds into US Treasury bonds. About 12% of the fund's funds are indirectly allocated to gold.