Gold will continue to shine! Hedge fund titan: The US's fiscal and monetary policies are the main drivers

Over the past year, international gold prices have repeatedly hit new highs. Despite some fluctuations, they have generally shown an upward trend. Since the beginning of this year, spot gold prices have surged by more than 20%, with most of the gains occurring in the first quarter.

However, many Wall Street bigwigs remain optimistic about the outlook for gold prices. For example, David Einhorn, a Wall Street hedge fund titan and the founder and president of Greenlight Capital, said on Wednesday that he still believes there is more upside room for gold.

He emphasized that his long-term view on gold remains correct, and gold prices may continue to rise.

"Gold prices are related to people's confidence in fiscal and monetary policies. Since we bought gold around 2008, it has been clear to me that both US fiscal and monetary policies have been too aggressive, creating risks," he said.

Einhorn pointed out that, relative to the size of the federal government's budget, the cost savings that the Musk-led "Department of Government Efficiency" (DOGE) has helped achieve so far are "a drop in the bucket," indicating that the fiscal situation is unlikely to change in the short term.

"Both parties have agreed to take no action on the deficit until we really face the next crisis," he added.

The hedge fund manager also said that gold and other defensive positions have helped Greenlight Capital start the year strongly. As previously reported, Greenlight Capital rose 8.2% in the first quarter of this year, while the S&P 500 index fell more than 4% over the same period.

Einhorn is not the only bigwig who believes gold prices will continue to rise.Billionaire investor Jeffrey Gundlach, known as the "Bond King," also believes that gold's record-breaking rally is far from over. He predicts that gold prices could climb to $4,000 per ounce.

He believes that due to concerns about various factors such as geopolitical instability and tariffs, as well as the existing scale of US debt, the market has already regarded gold as a real monetary asset.

In addition, the team of commodity analysts at Bank of America also expects that the likelihood of gold prices reaching $4,000 per ounce in the second half of this year is increasing.

As for other catalysts behind the rise in gold prices by the end of the year, Bank of America pointed out that geopolitical uncertainties triggered by global trade are the biggest driving force for gold price increases before the end of 2025, and concerns about the fiscal outlook of the US government may trigger the next wave of gold price increases.

On the other hand, Einhorn also noted that he expects US inflation to continue to heat up.

He disclosed that he holds long-term inflation swap contracts, betting that prices will rise faster than market expectations.

"All these actions (by the US government) will ultimately lead to inflation, and at a higher rate," he said.