Finance Associated Press, Oct 22 (Editor Huang Junzhi) Due to uncertainties surrounding the US election, escalating conflicts in the Middle East leading to a surge in safe-haven demand, and a loose monetary policy environment, people are flocking to gold as the safest "safe haven": After the recent consecutive record highs in the international gold price, there seems to be no sign of the upward trend stopping.

As of the time of publication, the spot gold trading price is $2737.64 per ounce, while the gold futures price is $2748.55 per ounce. However, Wall Street seems to believe that the upward trend in gold prices is far from over and will continue to climb to new highs.

Is a new bull market coming?

Asset management firm Sprott Asset Management's market strategist Paul Wong stated in the latest report that after gold hit new highs again, gold is in a "new call phase".

"Driven by central bank bids, rising US debt, and the possibility of the dollar peaking, gold has entered a new bullish phase," he wrote.

"Historically, concerns about debt sustainability, currency devaluation, and debt monetization have led to rising gold prices due to the increasing debt-to-GDP ratio in the US," he added.

The Congressional Budget Office projects that the percentage of public debt to GDP will rise from 98% in 2023 to 181% in 2053, reaching the highest level in US history.

Wong explained that as debt increases, governments may solve deficit issues by printing money, which could lead to currency depreciation. This erosion of trust in fiat currency enhances the attractiveness of gold as a reliable store of value.

He also added that persistent inflation pressures and the challenging macroeconomic conditions affecting the global economy indicate that central banks and investors are more likely to allocate to precious metals. According to data from the World Gold Council, in the first half of 2024, net gold purchases by central banks worldwide rose to 483 tons, 5% higher than the record set in the first half of 2023.

Wall Street sees gold as high as $3,000.

Despite international gold prices repeatedly hitting new highs, more and more analysts are predicting that the price of gold can continue to rise to $3,000 per ounce, with some even expecting the price to exceed $2,800 within the next 3 months.

Bank of America's commodity strategy analyst Michael Widmer recently stated, "Gold prices seem better now than ever before. I think we are close to $3,000."

Widmer mentioned that the rising government debt levels and geopolitical uncertainties are brewing, which is why he is bullish on the outlook. He pointed out that escalating geopolitical tensions usually lead investors to flock to safe-haven assets like gold to cushion global market risks and instability.

Citigroup analysts also insist that the price of gold will reach $3,000 in the next 6 to 9 months. They further stated that if oil prices surge due to the recent escalation in the Middle East situation, gold prices are also likely to rise. The bank noted that despite a slight decline in retail demand over the past three months, gold prices continue to perform "very well," reflecting buyers' willingness to pay higher prices.

Citigroup also forecasts that gold prices will reach $2,800 within three months.

Meanwhile, Commonwealth Bank of Australia analyst Vivek Dhar stated in a report on Monday that due to the "continuous weakness of the US dollar", he expects the average price of gold in the fourth quarter of next year to reach $3,000. He also expects the average price of gold for this quarter to reach $2,800.

Finally, Global X investment analyst Trevor Yates believes that it is not too late to enter the market now. He said: "We believe it is not too late to buy gold now. The two main drivers of the gold rally are strong physical and financial market demand."

Yates indicated that real interest rates may further decline, and the gold market has been incorporating the increasing probability of this more stagflationary environment into prices, in which gold historically performs well.

Editor/rice