Gold prices to see another +20% year, rallying to $3,300 as governments continue to spend – AuAg’s Eric Strand

(Kitco News, Jan. 21st, 2025) – The gold market is experiencing its best start to a year since 2023 and is on track for its strongest monthly performance since September, as prices test the upper end of their range near $2,750 an ounce.

January’s robust start could signal another big year for the precious metal, even after it rallied roughly 27% last year, according to one fund manager.

In his 2025 outlook report, Eric Strand, founder of the boutique precious metals firm AuAg Funds, stated that he expects gold prices to surpass $3,000 an ounce this year.

“We predict that gold will break the $3,000 level during the year and potentially finish even higher, with a realistic target of $3,300,” he said.

Strand’s bullish target represents a 20% gain from current levels. As of 2:15 pm ET, February gold futures were trading at $2,759.20, up 0.39% on the day.

Strand said the new Trump administration could usher in a new era of government stimulus and easier monetary policy.

“Both Donald Trump and Elon Musk have built their empires on loans, lots of loans, while driving full steam ahead,” Strand said in his report. “This will likely be the scenario for the coming four years. Avoiding a ‘bust’ at all costs to create a positive ‘boom.’ The price for this will be monetary inflation. An inflation boom creates a financial environment where commodity prices, including gold, rise significantly.”

While U.S. government debt has risen to historic levels, currently above $36 trillion, Strand noted that the U.S. is not alone. He highlighted that governments worldwide continue to engage in deficit spending.

“The amount of money in the system is increasing without much real growth being created, which naturally means that each monetary unit becomes less valuable,” he said.

These comments come as gold prices continue to trade near record highs against major currencies including the euro, British pound, yuan, Canadian dollar, and Australian dollar.

Gold remains an attractive safe-haven global currency as the de-globalization trend accelerates and nations diversify away from the U.S. dollar.

“We’ve seen the beginning of de-globalization, which seems to be intensifying, especially now as the U.S. seeks to impose conditions that favor itself. ‘America First’ policies and high tariffs may provide certain advantages for the U.S., but they also damage trust in a country that should instead be leading by example when it comes to free market economies,” Strand said. “This new phenomenon will likely drive inflationary pressures and potentially create a wave of devaluations in other countries to compensate for the tariffs.”

While gold appears poised to shine in the new year, Strand also recommends that investors pay closer attention to the beleaguered mining sector.

He noted that gold mining companies are not only historically undervalued relative to the gold price, but they are also in better financial shape as they continue to improve their balance sheets and control their spending.

“With gold prices, which generate revenue in USD, continuing to rise and costs stabilizing, we see significant margin improvements for these companies,” Strand said. “This percentage change could make the sector one of the big winners in the stock market in 2025.”

Posted by:

Jack Dempsey, President

41 Gold Consultants LLC

jdemp2003@gmail.com