The US gold market suggests a turning point towards 2030: The basis for the $8,900 target

Currently, the global financial order is undergoing a significant transformation. The latest “In Gold We Trust” report published by Incrementum clearly demonstrates that the global gold market, including the U.S. gold price, is evolving from a mere commodity market into a core asset in the reconstruction of the world financial system. This report suggests that by the end of 2030, the world gold price, including the U.S. gold market, could reach $8,900, prompting investors to develop new perceptions.

The current U.S. gold price reflects more than just price increases; it results from the interplay of multiple factors such as the wobbling of dollar hegemony, strategic central bank purchases, and structural inflationary pressures in the global economy.

From Dollar Hegemony to Multipolarity: Geopolitical Shifts Driving U.S. Gold Prices

As economist Zoltan Pozsar suggests in his paper “Bretton Woods III,” the world is moving toward a new international monetary system backed by gold. This shift is a fundamental factor supporting the rise of the U.S. gold price. The traditional system, where U.S. Treasuries and the dollar functioned as global reserve assets, is rapidly shifting toward a more neutral, confiscation-risk-free asset—gold.

The reasons why gold holds an advantage in the new financial order are clear. First, gold is a neutral asset not belonging to any specific country or political regime, serving as a foundation for integration in a multipolar world. Second, it carries no counterparty risk and can be stored domestically by each country to mitigate confiscation risks. Third, with an average daily trading volume exceeding $229 billion in 2024, gold exhibits extremely high liquidity—sometimes surpassing that of government bonds. These characteristics underpin the structural upward trend of the U.S. gold price.

Trump Policies and Fiscal Deficits: Factors Accelerating the Rise of U.S. Gold Prices

The policy shifts associated with President Trump’s return to the White House have directly impacted the U.S. gold market. Notably, the worsening fiscal situation and currency policies are key factors.

The U.S. currently pays over $1 trillion annually in interest on national debt—more than its defense budget. Although the DOGE (Department Optimization and Government Efficiency) program aimed to save $1 trillion annually, the actual savings are expected to be around $15 billion. This worsening fiscal situation suggests that the U.S. will have to rely on more aggressive monetary easing in the future, which is a significant support for the gold price.

On the trade front, new tariffs announced in April have pushed the average U.S. tariff rate close to 30%, far exceeding levels from the Smoot-Hawley Tariff Act of 1930. OECD data shows that the U.S. depends on Chinese inputs about three times more than China depends on the U.S., creating structural imbalances that could slow the U.S. economy. According to GDP Now indicators, the U.S. economy has already begun to contract, and if this trend continues, the Federal Reserve will face increasing pressure to pursue more aggressive monetary easing.

Central Bank Gold Purchases: Structural Support for the U.S. Gold Market

One of the most powerful factors supporting the rise of the U.S. gold market is strategic gold accumulation by central banks worldwide. Since the freezing of Russia’s foreign exchange reserves in 2022, central banks’ strategic interest in gold has surged, with over 1,000 tons of additional purchases for three consecutive years.

According to the World Gold Council, global gold reserves are projected to reach 36,252 tons by February 2025, with gold accounting for 22% of total foreign exchange reserves. This level is the highest since 1997, having risen sharply from the 9% low in 2016. However, compared to the historic peak of over 70% in 1980, there is still room for growth, indicating the potential for medium- to long-term increases in the U.S. gold price.

Particularly notable is the fact that purchases by Asian central banks constitute the majority of total demand. In 2024, Poland became the largest buyer, but the People’s Bank of China continues to buy about 40 tons per month, with Goldman Sachs estimating annual purchases reaching approximately 500 tons. This accounts for nearly half of the total central bank demand over the past three years and forms a structural demand supporting the global gold market, including the U.S. gold price.

Theoretical Foundations for Gold Price Increases Driven by Inflation and Money Supply Expansion

A key indicator emphasized in the report is the rapid expansion of the money supply. Since 1900, the U.S. population has increased 4.5 times, but the money supply M2 has expanded by an astonishing 2,333 times, increasing per capita by over 500 times. This stark divergence signifies a loss of real purchasing power of gold, making nominal gold prices rise inevitably.

Money supply in G20 countries has been growing at an average annual rate of 7.4%, and after three years of negative growth, it is now accelerating again. This expansive financial environment is likely to be the most fundamental driver supporting the rise of gold markets, including the U.S. gold price.

During the stagflation of the 1970s, the real annual compound growth rate of gold was 32.8%. If the current economic environment is heading toward a similar scenario, the U.S. gold price could demonstrate comparable strong performance.

Re-evaluating Gold’s Role in New Asset Allocation Strategies

Given the recognition that the traditional “60/40 portfolio” (60% stocks, 40% bonds) is no longer suitable for current market conditions, the report proposes a new asset allocation model.

The new 60/40 portfolio composition is as follows: 45% stocks, 15% bonds, 15% gold as a safe asset, 10% performance gold (silver, mining stocks, commodities), 10% commodities, and 5% Bitcoin. This shift reflects a loss of confidence in traditional safe assets like government bonds.

Gold is no longer just a non-yielding, non-productive asset; it often outperforms stocks and bonds in critical market phases. Analyzing 16 bear markets from 1929 to 2025 shows that in 15 of these, gold outperformed the S&P 500, with an average relative performance of 42.55%. Over the past five years, global gold prices have risen by 92%, while the purchasing power of the U.S. dollar has declined by nearly 50%, validating this strategic shift.

Market Phases of Gold and Potential for Upside Toward 2030

According to Dow Theory’s three-stage classification of bull markets, gold is currently in the “general investor participation” stage. This stage is characterized by optimistic media coverage, increased speculative interest, new financial product launches, and analyst target price upgrades—all signs of rapidly expanding market interest.

In Q1 2025, inflows into gold ETFs reached $21.1 billion, the second-highest ever. However, due to the soaring gold prices, this inflow in actual tonnage ranks as the 10th highest ever. Compared to inflows into equity and bond ETFs, gold ETF inflows are still only about one-eighth to one-fifth of those levels. This suggests that large-scale capital inflows from institutional investors into gold are still in early stages, leaving significant upside potential for the gold market, including the U.S. gold price.

According to Incrementum’s 2020 model forecasts, under the baseline scenario, gold could reach around $4,800 by the end of 2030, while under the inflation scenario, it could reach approximately $8,900. The current gold price already exceeds the $2,942 baseline target for the end of 2025, and depending on inflation trends over the next five years, there is a high likelihood of shifting from the baseline to the inflation scenario.

Mutual Complementarity with Bitcoin

Similarly, the role of Bitcoin is gaining attention alongside gold. The report indicates that Bitcoin could reach 50% of the market capitalization of gold by the end of 2030. Given that the current market cap of gold is about $23 trillion, Bitcoin would need to rise to approximately $900,000 to reach this target.

The report analyzes Bitcoin and gold as complementary rather than competing assets. Following the motto “competition stimulates business,” a combined investment strategy leveraging gold’s stability and Bitcoin’s convexity could deliver better risk-adjusted returns than investing in either alone.

Short-term Corrections and Long-term Upside: Risk Management for the U.S. Gold Market

While a medium- to long-term upward trend in the U.S. gold market is established, short-term risks also exist. Historically, gold in a bull market can experience corrections of 20% to 40%. The report points out the possibility of short-term declines to around $2,800 or sideways movements, especially in silver and mining stocks (performance gold), which tend to experience larger corrections.

Potential risks include unexpected declines in central bank demand, large-scale position reductions by speculators, geopolitical premium decreases, stronger-than-expected U.S. economic growth leading to interest rate tightening, and technical or emotional market volatility. The large sell-off in April 2025 exemplifies how quickly speculators can reduce their positions.

However, these short-term corrections are unlikely to threaten the medium- to long-term upward trend of the U.S. gold market and are more likely part of the stabilization process of a bull market.

Conclusion: The Revival of Gold in the Era of Financial Reorganization

Incrementum’s report analysis clearly indicates that the global gold market, including the U.S. gold price, is transforming from an outdated low-yield asset into a central asset in the modern financial reorganization.

The long-term rise of gold is supported by multiple mutually reinforcing factors: the inevitable reorganization of the global financial and monetary system, government and central bank inflationary trends, structural changes in the financial environment, the rise of gold-friendly regional economies such as Asia, capital outflows from U.S. assets, and the unexpectedly high profitability of performance gold.

The rise of the U.S. gold market may not only be a reaction to crises but could also signal the beginning of a “Golden Swan Moment.” As trust in existing currency systems continues to decline, gold is regaining its role as a traditional currency asset. Likely in the form of supranational settlement assets, it will serve as a neutral, debt-free foundation for trade and trust, rather than a tool of political power.

As traditional safe assets like U.S. Treasuries and German Bunds lose trust, gold is re-emerging as a core component of long-term investment strategies. The upward trend indicated by the gold market, including the U.S. gold price, symbolizes a transition to a new order in the global economy and suggests that gold is likely to solidify its position as a trustworthy asset by 2030.