Billionaire investor Gundlach, known as the "Bond King," stated that gold's record-breaking rally is far from over. He predicts that gold prices could climb to $4,000 per ounce, a 20% increase from the $3,345 level seen on Friday afternoon.
On Friday, after briefly dipping to a new low of $3,275, gold prices rebounded strongly and returned above the 20-day moving average. Traders noted that if gold prices can continue to rebound, they are expected to sustain the bullish momentum triggered on Monday.
Gundlach provided some theoretical support for this expectation. He pointed out that tariff-related volatility has fundamentally altered traders' perceptions of precious metals, with gold no longer being seen as a speculative tool for short-term traders or a long-term holding for survivalists.
He believes that due to concerns over geopolitical instability, including factors such as tariffs, as well as the existing scale of US debt, the market has come to view gold as a genuine monetary asset.
Gundlach added that the current market environment for other risky assets, such as stocks, is challenging. A crash in the US stock market could occur in the short term, with the S&P 500 possibly falling to 4,500 points. This would imply a 20% decline from the current level. In the medium term, investors are in a risk-averse market.
Healthy consolidation and significant rally
Analysts have pointed out that since Trump announced his victory in the 2024 presidential election, every correction in gold prices has begun with a sharp decline, but has been pushed back up by strong long-term bullish expectations, with the time required to recover losses gradually decreasing.
Healthy consolidation in gold prices is likely to continue in the short to medium term, but the structural factors supporting gold's strength remain: a weaker US dollar and fluctuations in US bond yields, the ongoing de-dollarization efforts by BRICS central banks, concerns over the ballooning US fiscal deficit, and geopolitical issues in Ukraine, the Middle East, and now between India and Pakistan.
According to data from the World Gold Council, the global market size of physical gold ETFs increased by $11 billion in April to reach $397 billion, signaling strong buying interest.
JPMorgan Chase has also once again raised its gold price expectations. Commodity strategist Natasha Kaneva expects that in the coming years, gold prices could reach the ambitious level of $6,000 without much effort, representing an approximately 80% increase from current levels.
