Will the gold price be $8,900 in 20 years? The bullish scenario indicated by the Incrementum report and its basis

According to the latest Incrementum report “In Gold We Trust,” the gold price could reach $8,900 by the end of 2030. As the global financial order accelerates its reorganization, gold is rapidly returning from peripheral assets to become the core of investment portfolios. Let’s explore the grounds and background of how gold prices might evolve over the next 20 years.

Is the current gold market still in the early stages? A bullish phase viewed through Dow Theory

Many investors believe that the bullish phase in gold has already ended. However, this report rejects that view. Based on Dow Theory, a bull market is divided into three stages: accumulation, participation by general investors, and euphoria. The report analyzes that the current gold market is in the second stage.

This stage is characterized by clear features. Media coverage becomes more optimistic, speculative interest and trading volume increase, and new financial products are launched one after another. Analysts also begin raising target prices during this period. Over the past five years, global gold prices have risen by 92%, while the real purchasing power of the US dollar has declined by nearly 50%.

Compared to the “Golden Decade” forecast presented in the 2020 report, the current gold price movements already surpass the baseline scenario. In 2024, gold has set a new record by surpassing its previous all-time high 43 times in US dollar terms. This is second only to the 57 times in 1979. Technically, gold is not only breaking through absolute price levels but also reaching new heights relative to stocks. For investors already holding gold, continuing to hold is a prudent decision, and for new entrants, the investment appeal remains high at this point.

Dollar collapse and central bank demand driving gold price increases

Several factors support the rise in gold prices. First, the wobbling of US dollar dominance is a key factor. This is rooted in the hollowing out of US industry and uncontrollable fiscal deficits. Trump’s dollar devaluation policies also likely provide tailwinds for gold. Simultaneously, central bank buying remains the biggest driver of gold price increases.

Since 2009, central banks have consistently bought more gold than they sold, and since the freezing of Russia’s foreign exchange reserves in 2022, their purchasing pace has accelerated significantly. Remarkably, central banks have purchased over 1,000 tons of gold annually for three consecutive years. According to World Gold Council statistics, as of February 2025, the world’s gold reserves reached 36,252 tons.

Of particular note are regional purchasing trends. While Asian central banks account for most of these purchases, Poland became the largest buyer in 2024. Large-scale purchases by China continue, with Goldman Sachs estimating that China will continue buying about 40 tons per month. This amounts to nearly 500 tons annually, roughly half of the total central bank demand over the past three years.

The money supply of fiat currencies continues to expand arbitrarily. Since 1900, US population increased 4.5 times, but M2 money supply increased by 2,333 times. Per capita, this is an increase of over 500 times. This expansion of the money supply is the primary long-term driver of gold prices.

The path to $8,900 by the end of 2030: The plausibility of inflation scenarios

Incrementum presented multiple gold price models in 2020. The basic scenario projected around $4,800 by the end of 2030, with a mid-term target of $2,942 by the end of 2025. In contrast, the inflation scenario estimates $8,900 by 2030 and $4,080 by 2025.

Currently, gold prices already exceed the mid-term target of $2,942 in the basic scenario. Depending on future inflation rates, the report predicts that the 20-year gold price is likely to be positioned between the two scenarios.

Inflation risk can never be entirely eliminated. There are many similarities between the resurgence of inflation in the 1970s and the current situation. Economic downturns and crashes in capital markets tend to bring deflation, but responses tend to be highly inflationary. The likelihood of ultra-expansionary measures such as Fed quantitative easing, yield curve control, MMT, or helicopter money is high.

Historical data shows that gold tends to outperform in stagflation environments. During the stagflation of the 1970s, gold’s average real annual compound growth rate reached 32.8%. If the current environment follows a similar scenario, reaching $8,900 or even higher levels is not impossible.

The role shift of gold reflected in the new 60/40 portfolio

The traditional asset allocation has been 60% stocks and 40% bonds. However, due to rapid changes in the financial environment, this model is becoming outdated. The new 60/40 portfolio proposed by the report is as follows:

Stocks are reduced to 45%, while gold as a safe asset accounts for 15%, performance gold (silver, mining stocks, commodities) for 10%, and Bitcoin for 5%. Bonds are compressed to 15%. This allocation reflects the loss of trust in traditional safe assets like government bonds.

A notable point is the clear distinction between “safe assets like gold” and “performance gold.” Silver and mining stocks hold the potential for significant returns in the coming years. Historically, when the market leads with gold, silver and mining stocks tend to follow in a relay race. Understanding this structure allows investors to build positions gradually.

Short-term risks investors should be aware of: the possibility of a $2,800 correction

While an optimistic scenario exists, there are also short-term correction pressures. The report points out that gold prices could temporarily fall to around $2,800. This is part of the stabilization process of the bull market, but investor positions could be reduced quickly.

Unexpected declines in central bank demand are also risks. If the current quarterly average purchase of 250 tons sharply slows down, structural demand could decrease. Additionally, a decline in geopolitical premiums could impact prices. An early end to the Ukraine war, easing of Middle East tensions, or a rapid resolution of trade conflicts with China could significantly reduce geopolitical premiums.

However, the report remains confident in the long-term upward trend. Short-term market tensions exist, but in the medium to long term, gold remains a scarce asset capable of both preserving and increasing wealth.

Gold, which does not pay dividends and is non-productive, often outperforms stocks and bonds during critical market phases. Analyzing 16 bear markets from 1929 to 2025 shows that in 15 of these, gold outperformed the S&P 500, with an average relative performance of 42.55%.

In an era of rapid reorganization of the global financial order, the gold price in 20 years will not just be a commodity price but a symbol of the transition to a new monetary system. If inflation scenarios materialize, $8,900 is not an unrealistic target and will likely serve as a compass for investors’ long-term strategies.