After gold prices registered the largest annual increase since 2010 in 2024, fund managers have ample reasons to remain bullish on Gold.

Gold prices surged 27% last year, reaching a historic high of nearly 2800 dollars per ounce.

Three major factors fueled the rise in Gold: central banks around the world, especially those in China and other emerging markets, purchased gold in large quantities; the Federal Reserve's monetary easing policies made the non-yielding gold more attractive; and amid ongoing geopolitical tensions from the Russia-Ukraine conflict and wars in the Middle East, gold played its historical role as a safe haven.

Entering 2025, these driving factors remain largely unchanged. However, investors are also preparing for Trump's second term and its potential impacts on trade flows, inflation, and the global economy. This outlook continues to stimulate gold bids as a way to protect wealth and hedge against potential negative shocks.

Greg Sharenow, a portfolio manager at The Pacific Investment Management Company (PIMCO), stated that diversifying investments by purchasing gold is "a trend that will continue. We expect central banks and high-net-worth families to keep finding gold attractive."

An extreme example is that hedge fund Quantix Commodities holds 30% of its portfolio in gold, nearly double the weight of gold in the Bloomberg Commodity Index. Quantix plans to maintain its overweight position in gold throughout this year, with senior executive Matt Schwab expecting gold to rise to 3000 dollars by 2025.

Sell-side strategists at Wall Street banks are also bullish on gold. Bank of America and JPMorgan predict that gold prices will reach 3000 dollars by the end of this year, while UBS Group believes it will reach 2900 dollars. At the beginning of January, spot gold traded for over 2600 dollars per ounce.

It can be confirmed that since the USA election on November 5th last year, Gold has declined. The dollar, US stocks, and Bitcoin have rebounded amidst the market's excitement over Trump's victory, while Gold has lost in the process. However, in the long run, the likelihood that the Trump administration will implement new tariffs is seen as likely to accelerate trade tensions and bring risks of economic growth slowing down. Economists and Analysts believe that Trump's proposed measures will fuel inflation and complicate the Federal Reserve's path of rate cuts this year.

After Federal Reserve officials fulfilled the expectation of a 25 basis point rate cut at the last meeting of 2024, they hinted that only two cuts will occur in 2025, and they are taking a more cautious approach to further rate cuts.

"If trade relations deteriorate due to Trump's new policies, we may see a negative reaction from the stock market," said Darwei Kung, head of commodities at DWS Group. "Gold will be a good asset to hedge against this risk," he believes that Gold prices will rise to $2,800 by the end of the year.

For the rest of the world, a potential trade war with the USA may prompt central banks to accelerate easing. Aline Carnizelo, managing partner of Swiss Frontier Commodities, believes that this situation will boost Gold price performance, and she expects Gold prices to surpass $2,800 this year.

Patrick Fruzzetti, portfolio manager at Rose Advisors in New York, stated that the biggest difference now compared to when Trump first came to power is the level of deficit spending.

Data from the Congressional Budget Office shows that the US debt burden has risen from less than $17 trillion at the end of 2019 to about $28 trillion, with federal deficits expected to exceed 6% of GDP by 2025.

Jeff Muhlenkamp stated that concerns about the US government's ability to repay debt may deter some investors from putting funds into US Treasury bonds, and he has indirectly allocated about 12% of the capital in his eponymous Fund to Gold.

"Actions speak louder than words," Fruzzetti stated while talking about the Trump administration's commitment to controlling federal deficits. "I won't reduce my Gold positions until they show me a different scenario."