Gold Trends: Bullish Scenario Toward 2030 Indicated by Incrementum Report

As the global political and economic order is rapidly reshaped, gold is quietly regaining its position at the center of the market. The transition of gold suggested by Incrementum’s 2025 Annual Report “In Gold We Trust” reflects not just a temporary price increase but an essential transformation of the financial system itself. The report indicates that gold could reach $8,900 by the end of 2030, emphasizing that the current bull market is still in its early stages.

Current Status of the Gold Market Transition

Over the past five years, gold has experienced dramatic changes. While global gold prices have risen by 92%, the real purchasing power of the US dollar has decreased by nearly 50%. As of the end of April 2025, gold has set a new high 22 times in US dollar terms, continuing to break records at a pace second only to the 43 times recorded last year.

In light of the Dow Theory’s three-stage bull market model, gold is currently in the “general investor participation stage.” During this phase, media coverage becomes increasingly optimistic, speculative interest and trading volume surge, new financial products are launched one after another, and analysts raise target prices—a typical pattern. In the first quarter of 2025 alone, inflows into gold ETFs reached $21.1 billion, the second-highest level in history.

Notably, gold is not only breaking new highs in absolute price but also forming a technical breakthrough at a relative level. Compared to traditional assets like stocks and bonds, gold’s dominance is becoming more established.

Structural Factors Accelerating Gold Transition

Reorganization of the Global Financial Order

About 50 years after the Bretton Woods Agreement, the world is shifting toward a new financial order. As pointed out in economist Zoltan Pozsar’s “Bretton Woods III” thesis, the international system is transitioning from the first generation backed by gold to the second backed by US Treasuries, and now, to the third generation backed by gold and commodities.

In this transition, gold possesses three key advantages. First, gold is a neutral asset not belonging to any specific country or party, and it can serve as an element of integration in a multipolar world. Second, gold carries no credit risk and can be stored domestically by countries, easily avoiding confiscation risks. Furthermore, the average daily trading volume in 2024 exceeded $229 billion, and according to the London Bullion Market Association, gold can sometimes be more liquid than government bonds.

Large-Scale Central Bank Purchases of Gold

The most direct support for gold’s transition comes from demand by central banks. Since 2009, central banks worldwide have consistently been net buyers of gold, and this trend has accelerated sharply since the freezing of Russia’s foreign exchange reserves in 2022. According to data from the World Gold Council, central banks have added over 1,000 tons of gold reserves each year for the past three years, achieving a “hat trick.”

As of February 2025, global gold reserves reached 36,252 tons, accounting for 22% of total foreign exchange reserves. This is the highest level since 1997, more than doubling from the lowest point of about 9% in 2016. According to Goldman Sachs estimates, the People’s Bank of China is expected to continue purchasing gold at a pace of about 40 tons per month, with annual purchases approaching 500 tons.

New Investment Environment and Gold’s Role

Reorganization of Financial Markets and the Shake-up of Dollar Hegemony

Against the backdrop of US industrial hollowing-out and uncontrollable fiscal deficits, policy shifts under the Trump administration have further propelled gold’s transition. Annual interest payments on US Treasuries now exceed $1 trillion, surpassing even defense budgets, with limited efforts to reduce new fiscal deficits. Meanwhile, due to new tariff policies, the US average tariff rate has soared to nearly 30%, reaching levels not seen since the Smoot-Hawley Tariff Act of 1930.

As the dollar-based system begins to waver, gold is regaining its status as a supranational settlement asset. Coupled with the decline in the dollar’s purchasing power, the relative value of gold is rising rapidly.

New Portfolio Strategies

Traditional investment strategies based on a 60% stock and 40% bond allocation are no longer suitable for the current market environment. Incrementum proposes a new 60/40 portfolio, incorporating 15% gold and allocating 10% to “performance gold,” such as silver and mining stocks. The remaining 35% consists of 45% stocks, 10% commodities, and 5% Bitcoin, reflecting a loss of confidence in traditional safe assets.

The report emphasizes the importance of distinguishing between gold as a safe asset and performance gold aimed at high growth. Silver, mining stocks, and commodities are believed to have the potential for growth exceeding that of gold over the coming years.

Inflation Risks and Gold’s Defensive Power

Rapid Expansion of the Money Supply

Taking the US since 1900 as an example, the population increased 4.5 times, but the money supply M2 expanded by 2,333 times, and per capita, it increased over 500 times. Since gold supply cannot be arbitrarily expanded, its relative value must inevitably rise amid currency inflation.

G20 countries’ money supply has increased at an average annual rate of 7.4%, and after three years of negative growth, it is accelerating again. Even during economic downturns, central bank responses tend to be highly inflationary, with measures such as yield curve control, new quantitative easing, financial repression, MMT, and helicopter money potentially further expanding the currency base.

Gold in a Stagflation Environment

Historical data shows that gold performs exceptionally well during stagflation. During the stagflation of the 1970s, gold’s real annual compound growth rate was 32.8%, and silver reached 33.1%. Given the similarities between the current macroeconomic environment and that era, the importance of allocating to gold increases even further.

Gold Price Forecast for 2030

According to Incrementum’s 2020 model, there are two scenarios for gold prices by 2030. The baseline scenario projects around $4,800, while an inflation scenario suggests reaching approximately $8,900. The current gold price already exceeds the mid-term target of $2,942 set for the end of 2025, and the report predicts that over the next five years, depending on inflation trends, the price will likely fall between these two scenarios.

Using the concept of “Shadow Gold” analysis, which estimates the theoretical gold price if the monetary base were fully backed by gold, the US M2 would need to be fully backed by gold at a price of $82,223. To meet the 40% reserve requirement set by the Federal Reserve Act of 1914, the current M0 would require a gold price of $8,566.

Coexistence with Bitcoin

Alongside the transition of gold, Bitcoin is also rapidly rising. Against the backdrop of increasing geopolitical tensions, Bitcoin’s advantages as a decentralized cryptocurrency are clear. Its independence from state control and cross-border transaction capabilities offer an alternative to traditional currencies.

As of the end of April 2025, the market value of mined gold is approximately $23 trillion, while Bitcoin’s market value is about $1.9 trillion, roughly 8% of gold’s market value. The report suggests that Bitcoin could reach 50% of gold’s market cap by the end of 2030, which would imply a Bitcoin price of about $900,000. The combination of gold and Bitcoin is believed to potentially outperform individual investments on a risk-adjusted basis.

Short-term Risks and Adjustment Phases

While the long-term upward trend remains firm, several short-term risks are identified. These include a potential unexpected decline in central bank demand from an average of 250 tons per quarter, position reductions by speculators, a decrease in geopolitical premiums, unexpectedly strong US economic data, and a rapid reversal of the dollar’s strength.

The report indicates that a short-term correction could see gold prices fall to around $2,800. However, such a correction is viewed as part of the stabilization process of the bull market and does not threaten the medium- to long-term upward trend of gold. Investors are advised to maintain consistent risk management strategies and respond to market fluctuations.

Conclusion: The Continuation of Gold’s Transition

The reorganization of the global political and economic order, inflationary trends driven by governments and central banks, the rise of gold-friendly regional economies in Asia and the Arab world, capital outflows from US assets, and the expected excess returns of performance gold all reinforce each other, making gold’s transition an unstoppable trend.

The current rise in gold prices is not only a reaction to crises but also a precursor to the shift toward a new financial order. As confidence in traditional safe assets like government bonds wanes, gold will function as a neutral, debt-free, and truly trustworthy foundation. It is likely to serve as a supranational settlement asset, not as a tool of political power, but as a basis for transactions and exchanges in a multipolar world.

In an era where the trust in existing currency systems continues to decline, gold’s transition is expected to accelerate. Amid geopolitical and economic turmoil, gold is re-establishing its position as a reliable safe asset.