The golden rally road is far from over! Wall Street sees these few "tailwind" stocks.

Since the beginning of this year, in an environment of continued turbulence in the international situation and heightened risk aversion, the international gold price has repeatedly hit new highs. Today, with the market expecting the Fed's "first cut" to come soon, the price of gold has soared again: spot gold in London hit a historical high of $3680 per ounce for the first time; COMEX also reached a historical high of $3720 per ounce. However, Wall Street seems to believe that the upward trend in gold prices is far from over. Goldman Sachs has stated that if the economy slides into recession and investors abandon traditional safe-haven investments like U.S. Treasury bonds, the price of gold could rise to $5,000. In this scenario, investors trust hard assets like gold more than the U.S. dollar. Jose Gomez, co-founder of the online trading platform Summit Metals, said, "If interest rates are lowered, the year-end target for gold in 2025 is around $3750. The current price already reflects the interest rate cut. However, even if everything remains the same, $3750 is still possible." As for why the upward trend in gold prices will continue, experts have given the following reasons: The Fed and Interest Rates If the Fed cuts interest rates as expected, good opportunities to buy gold will continue. Lina Thomas, an economic analyst at Goldman Sachs Research, said, "We have seen this situation in 2008, 2020, and even in August 2024. Now is a good time to buy gold because as investors seek safe assets, gold usually rebounds shortly after purchase." Government Debt The rapid increase in U.S. debt burden is sending shockwaves through the entire safe-haven asset market. Thomas Winmill, portfolio manager of Midas Funds, said, "The U.S. government's fiscal and monetary policy, including massive U.S. deficit spending and incomprehensible U.S. public debt obligations, such as welfare (such as social security, Medicare, Medicaid, and veterans benefits), will require the creation of more dollars to pay current commitments and interest." He believes that given the current budget deficit, repaying the large amount of U.S. public debt owed is not easy. He said, "In this environment, the continued creation of dollars has and will continue to lead to a fall in the dollar, causing U.S. prices to rise and leading to an increase in the prices of all 'hard' assets, including gold." Perfect Storm Despite interest rates remaining low, the price of gold has been rising, and historically, the price of gold has always been related to real interest rates. However, Tracy Shuchart, a senior economist at Ninja Trader based in Chicago, said that this correlation has been broken this year, indicating that some structural factors related to capital allocation, foreign exchange reserve management, and risk perception are changing. "The weakening of the dollar has made gold cheaper for foreign buyers and added further momentum to the price of gold," Shuchart said. "Persistent levels of inflation have always been higher than the Fed's target, which also enhances the attractiveness of gold as a long-term store of value." Furthermore, this year's spike in gold prices is likely a result of converging macroeconomic risks. Shuchart said, "These risks include the dollar's trajectory, central bank buying, inflation concerns, and potential doubts about the unprecedented stress facing the global financial architecture." "In addition, central banks, especially those of emerging economies, have been increasing their purchases of gold as a strategic hedge against exchange rate instability and debt concerns. This stable accumulation has put real pressure on the supply side and has the potential to bring in buyers to the gold market at any price," he added. Should one continue to hold or sell for profit? Experts believe that the exit strategy for any gold investor should be based on the cost basis of their investment portfolio (i.e., the amount they paid for the portfolio) and the return on investment they expect. Gomez advised, "People should hold gold until it can be exchanged for dollars, and then make another investment purchase without losing the original purchasing power." The duration of holding gold is also an important factor in selling. Gomez said, "If you have held gold for more than 20 years and are about to retire, now is a good time to sell gold because you can use that money to purchase other assets, like more real estate." Even if a "sell" decision is made, investors should still allocate some gold in their portfolio, but not as a core holding or income source. "In terms of diversified investing and risk management, gold has real advantages because its correlation with stocks and bonds is often low, especially during periods of market pressure or uncertainty," Shuchart said. "When stocks and fixed-income markets fluctuate, it can buffer losses in the portfolio, almost like financial insurance." "Furthermore, in cases of inflation or loss of purchasing power in currency, gold reliably preserves value. Its global liquidity makes cross-cycle buying and selling easy," he added. Shuchart suggested, "For most investors, allocating around 3-10% of the portfolio strategically and prioritizing physical gold and/or gold ETFs seems sufficient to benefit from its hedging properties without compromising long-term growth objectives or bearing storage and tax burdens." This article is reprinted from "Cai Lian She"; GMTEight Editor: Li Fu.