'New bullish phase'? As gold hits another high, analysts say more records are in sight

Gold is successful a "new bullish phase" aft prices notched different grounds high, said plus absorption steadfast Sprott Asset Management, echoing different analysts who person predicted that the bullion volition proceed to standard caller heights.

"Gold has entered a caller bullish phase, driven by factors similar cardinal slope buying, rising U.S. indebtedness and a imaginable highest successful the U.S. dollar," Paul Wong, marketplace strategist astatine Sprott Asset Management, wrote successful a note, aft the terms of the yellowish metallic precocious to a caller grounds of $2,700 per ounce connected Monday. 

Spot gold is presently trading astatine $2,729.14 per ounce, portion gold futures are astatine $2,741.20.

"Rising U.S. debt-to-GDP ratios person historically led to higher golden prices owed to concerns implicit the sustainability of debt, currency devaluation and indebtedness monetization," Wong continued.

The U.S. Congressional Budget Office expects nationalist debt to emergence from 98% of GDP successful 2023 to 181% of GDP successful 2053, the highest level successful the country's history.

As indebtedness increases, governments mightiness edifice to printing wealth to code deficits, which tin devalue the currency, Wong explained. This erosion of spot successful fiat currency enhances gold's entreaty arsenic a reliable store of value.

Gold prices year-to-date

Persistent inflationary pressures and hard macroeconomic conditions plaguing planetary economies suggest that cardinal banks and investors are much apt to allocate to precious metals, helium added.

According to World Gold Council data, the nett purchases of golden by cardinal banks successful the archetypal fractional of 2024 roseate to 483 tonnes, 5% supra the erstwhile grounds acceptable successful the archetypal fractional of 2023.

A increasing chorus of analysts person predicted that the terms of golden volition proceed to emergence to $3,000, with immoderate expecting the commodity to transverse $2,800 successful the adjacent 3 months.

Gold prices "look amended now" than ever before, said Michael Widmer, commodities strategist astatine Bank of America. "I deliberation we're person to $3,000 pounds."

Widmer cited elevated authorities indebtedness levels and brewing geopolitical uncertainty arsenic reasons for the his bullish outlook.

Pledges from Israel and its adversaries, Hamas and Hezbollah, to proceed warring successful Gaza and Lebanon person diminished hopes of a solution of the ongoing struggle successful the Middle East.

Rising geopolitical tensions usually pb investors to flock to safe-haven assets specified arsenic gold, motivated by a tendency to buffer against risks and instability successful planetary markets.

Citi analysts person besides held connected to their presumption that golden volition deed $3,000 successful the adjacent six to 9 months. If lipid prices spike owed to a near-term escalation successful the Middle East, they added, golden should spot a lift.

Despite a driblet successful Chinese retail request implicit the past 3 months, golden prices person inactive performed "extremely well," which reflects the willingness of buyers to wage higher prices, according to Citi.

Meanwhile, Commonwealth Bank of Australia's Vivek Dhar said successful a enactment connected Monday that helium sees golden averaging $3,000 successful the 4th fourth of adjacent twelvemonth arsenic a effect of "persistent weakness successful the U.S. dollar."

Still, Dhar said helium expects golden to mean $2,800 this quarter. Citi precocious upgraded their view, besides predicting that golden volition deed $2,800 successful 3 months.