Zhijing Finance learned that after a glorious 2024, Fund managers still see reasons to remain bullish on Gold. The price of Gold soared 27% last year, reaching a historic high of nearly $2800 per ounce, marking the largest annual increase since 2010. Three main factors have driven the rise in Gold prices: global central banks are buying heavily, particularly the central banks of China and other Emerging Markets; the Federal Reserve's interest rate cuts make non-yielding Gold more attractive; and Gold's traditional role as a safe haven in geopolitical tensions.

By 2025, these driving factors are expected to remain more or less unchanged. Investors are also preparing for Trump's second term and the potential impacts this new president may have on trade flows, inflation, and the global economy. This outlook continues to drive people to buy Gold as a way to protect wealth and hedge against potential negative impacts.

Greg Sharenow, a portfolio manager at Pacific Investment Management Company (PIMCO), stated that diversifying investments by buying Gold is "a trend that will continue." Sharenow noted, "We expect that major central banks and high-net-worth families will continue to find Gold appealing."

An extreme example is that the American hedge fund Quantix Commodities holds 30% of Gold, nearly double the weight of Gold in the Bloomberg Commodity Index. Quantix executive Matt Schwab mentioned that Quantix plans to maintain its Shareholding positions this year, expecting the price of Gold to rise to $3000 by 2025.

Sell-side strategists at Wall Street banks are also optimistic. Overall, the top ten investment banks on Wall Street, including JPMorgan and Citigroup, expect the price of Gold to rise by an average of 8% this year, reaching $2860. The Bank of America and JPMorgan predict that the price of Gold will reach $3000 by the end of this year, while UBS Group expects it to be $2900. At the beginning of January, the spot price of Gold traded above $2600 per ounce.

Goldman Sachs' analysts expect that if the scale of Gold purchased by major global central banks exceeds market expectations, the price of Gold may rise to $3,050. The Institutions also indicated that if the Federal Reserve decides to cut interest rates only once more this year, the price of Gold could stagnate around $2,900. However, Goldman Sachs' expectation of $2,900 is also higher than the average expectation on Wall Street.

Indeed, since the U.S. election on November 5, the price of Gold has been declining. Amid the market excitement triggered by Trump's victory, Gold has dropped amidst rebounds in the Dollar, stock market, and risk assets like Bitcoin.

However, in the long term, the potential for new tariffs is seen as likely to exacerbate trade tensions, potentially leading to an economic slowdown. Economists and Analysts believe that the measures proposed by Trump have exacerbated inflation, complicating the Federal Reserve's path to cut interest rates this year. After cutting rates by 25 basis points as expected at the last meeting of 2024, Federal Reserve officials hinted on December 18 that there would only be two cuts in 2025, and they would be more cautious about further lowering borrowing costs.

Darwei Kung, head of commodities at DWS Group, said: "If trade relations worsen due to Trump's new policies, we may see a negative reaction in the stock market, and Gold will be a good asset to hedge against such risks." He expects the price of Gold to 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 major central banks to expedite their easing measures. Aline Carnizelo, managing partner of the Swiss company Frontier Commodities, said that this situation would boost Gold's performance, and he expects the price of Gold to exceed $2,800 this year.

Patrick Fruzzetti, portfolio manager at New York's Rose Advisors, stated that the biggest difference now compared to when Trump first took office is the level of deficit spending. According to data from the Congressional Budget Office (CBO), the U.S. debt burden has risen from less than $17 trillion at the end of 2019 to about $28 trillion, and the U.S. federal deficit is expected to exceed 6% of GDP in 2025.

Regarding the new government's commitment to control the federal deficit, Fruzzetti stated: "Action speaks louder than words. I won't reduce my Gold position until they show me different scenarios."

Hedge fund Jeff Muhlenkamp pointed out that concerns about the USA government's ability to repay debt may deter some investors from putting money into US Treasury bonds. About 12% of the fund's assets are indirectly allocated to Gold.