Gold has been experiencing a significant uptrend, breaking through the $3,000 mark for the first time last week, and analysts are now anticipating even higher prices for this precious metal.
Jeffrey Gundlach, the CEO of DoubleLine Capital and known as the “Bond King” due to his insights in fixed-income markets, asserts that this rally is just beginning and could push gold prices beyond $4,000.
During a macroeconomic outlook presentation titled “Not in My Neighborhood,” Gundlach emphasized gold’s persistent price momentum alongside various commodities. Gold-backed cryptocurrencies, such as PAXG and XAUT, have also seen gains from this historic price surge.
“I believe gold will reach $4,000. I’m not certain it will happen within this year, but it seems to be the logical target based on the prolonged consolidation around $1,800,” Gundlach explained.
So far this year, gold-backed cryptocurrencies have outpaced the overall cryptocurrency market. PAXG and XAUT have appreciated by roughly 14% year-to-date, while bitcoin has seen a decline of 11.4% during the same timeframe, with the broader market retreating by over 25%. Recently, gold ETFs have outperformed bitcoin ETFs in terms of assets under management.
His projection is based on the evolving strategies of central banks. Around the globe, central banks have started to bolster their gold reserves, marking a reversal from a previous trend of diminishing holdings. According to data presented by Gundlach from the IMF, global gold reserves have increased from about 34 billion Special Drawing Rights (SDR) in 2010 to 40.9 billion SDR, reaching levels not seen since the mid-1970s to early 1980s.
Special Drawing Rights represent an international reserve asset created by the IMF in 1969, defined by a basket of currencies.