For gold, this year is an exciting one. The price of this precious metal has risen about 12.9% (in US dollars) so far this year.

Although the increase in silver is 24.5%, the Nasdaq index (19.4%) and the S&P 500 index (15.8%), as well as the Argentine stock market (which has only risen by 49.5%), have made this figure pale in comparison. However, for an inert metal, this is already a pretty good performance.

A month ago, gold reached its highest point so far this year, about $2425 per ounce. Since then, gold has been in the doldrums. The Chinese central bank has been thought to be pushing up the price of gold in recent months, but it has paused buying recently. So what is the next step for gold?

At least some analysts believe that gold still has room to rise. Bank of America's team released a report on Monday stating that gold could reach $3000 per ounce in the next 12 to 18 months. Clearly, this does not mean anything. No one has a crystal ball, so no one knows how much anything will cost in the future, but predictions still have their uses.

First, you can use them to test sentiment. At one point, $3000 an ounce of gold seemed a bit like $200 oil - an extreme price, and likely a top signal. Now, $3000 is less than 30% away from us, which doesn't seem so extreme.

Second, you can listen to other people's arguments and decide for yourself whether they make sense. Bank of America says the key is investment demand.

Data from the World Gold Council shows that central banks around the world are increasingly keen to use gold as a useful financial asset rather than a historical artifact. But this is not just a central bank issue. If the Fed ultimately begins to cut US rates, it could stimulate demand from investors in developed markets. In the current rally, they are mainly selling gold ETFs they hold, but as shown in the figure below, the total holdings of ETFs seem to have stabilized in the past two months.

Another view put forward by Bank of America's team is that the violent fluctuation of the US Treasury bond market is a "tail risk". In other words, the possibility is not great, but with the passage of time, the possibility will become greater.

Although the argument that the US dollar is likely to be replaced as the world's reserve currency in the near future is not yet convincing, this cannot be a reason for complacency. We have seen how quickly France has become a global "troublemaker" to replace the UK as a newcomer in the European financial center.

More importantly, the US Treasury bond market does not need a real disaster to stimulate demand for alternative safe havens. It only needs to intensify concerns about the possible disaster. The liquidity of the US debt market itself is no longer as good as before. There are many reasons for this, mainly related to regulations enacted after the financial crisis.

In any case, if the US Treasury bond market becomes more vulnerable, and coupled with the US political situation being deadlocked and the high debt, it can be said that there is fertile soil for worrying about accidents.

Of course, the difficulty of facing balance sheet problems is not limited to the US economy. It is hard to find a developed economy that is not like this. Although various think tanks continue to criticize the Labor Party and the Conservative Party's vague manifesto promises and unrealistic policy cost calculations, Britain is far from the worst.

All of this debt makes people believe that another full-blown reason for government policies to move fully towards inflation is another reason. Because if inflation continues to cool down, then debt will only continue to grow (calculated by "real" value), thereby becoming heavier.

As long as we are in an environment that is more prone to inflation, the "preventive" pursuit of gold seems to continue.