Gold prices are in the midst of a "big long": Looking ahead to the end of the dollar as the global reserve currency by 2030

As suggested by the latest analysis from Incrementum, the gold market is currently undergoing a dramatic shift from peripheral asset classes to the core of capital allocation. The possibility of gold reaching $8,900 by the end of 2030 is not merely a numerical forecast but a realistic scenario reflecting a fundamental reorganization of the global financial order. This change is occurring amid the interplay of multiple structural factors, including the wobbling of the dollar-based reserve currency system, strategic gold purchases by central banks worldwide, and the rapid expansion of government debt.

Reading the Gold Market with Dow Theory: From Peripheral Assets to the Core

The bullish phase of gold is now in its second stage, “general investor participation.” Using the framework of Dow Theory, typical characteristics such as media optimism, increased speculative trading, the emergence of new financial products, and upward revisions of analyst forecasts are prominently evident. Looking back over the past decade, gold prices have risen by 92%, while the real purchasing power of the US dollar has declined by nearly 50%. This inverse correlation is not coincidental but a clear signal of the declining credibility of the currency system itself.

The reality told by statistics is unmistakable. Last year, gold hit a record high in USD 43 times, already reaching 22 times by early 2025. Despite surpassing the $3,000 mark, compared to historic gold bull markets, the current pace of growth is relatively modest, implicitly suggesting significant room for further appreciation. In relative value metrics, gold is forming a technical breakthrough against equities, indicating that its dominance over traditional assets has been established.

Expansion of Money Supply Erodes the Real Value of the Dollar

Understanding the rise in gold prices requires paying attention to trends in the money supply. Since 1900, while the US population increased by 4.5 times, the M2 money supply expanded by an astonishing 2,333 times. Per capita, this is over 500 times. If we compare this ratio to that of a “steroid-enhanced athlete,” it appears impressive but structurally fragile.

Across G20 countries, the money supply has grown at an average annual rate of 7.4%. After three years of negative growth, the trend has resumed its expansion phase, which could serve as a new engine for large-scale inflationary pressures. Whether intentionally or not, the increase in currency supply fundamentally supports non-productive assets like gold. As the foundation of the dollar-based reserve system weakens, gold’s role as a “store of true value” is an inevitable development.

Transition of the Bretton Woods System: Why Gold Will Become the “Supernational Currency” of the 21st Century

In 2022, economist Zoltan Pozsar’s paper “Bretton Woods III” caused ripples in the international financial community. His proposed shift—from the gold-backed Bretton Woods I to the dollar-backed Bretton Woods II, and further to Bretton Woods III backed by gold and commodities—becomes increasingly plausible.

In this new order, gold offers three key advantages. First, gold is neutral, not belonging to any specific nation or political force. In a multipolar world, such “politically colorless” assets could serve as a unifying element. Second, gold carries no counterparty risk. It is a pure asset that can be stored domestically, free from confiscation or freezing risks. Third, liquidity is high; according to the London Bullion Market Association, the daily trading volume in the gold market in 2024 averaged $229 billion, sometimes surpassing that of government bonds.

Geopolitical Tensions and Central Bank Buying Strategies: Structural Pillars Supporting Gold Price Rise

Central banks worldwide no longer regard gold as a relic of the past. Since 2009, they have maintained a net purchase stance, with the pace accelerating dramatically after Russia’s foreign exchange reserves were frozen in 2022. Remarkably, they achieved a “hat trick” of purchasing over 1,000 tons of gold for three consecutive years.

According to the latest data from the World Gold Council, global gold reserves reached 36,252 tons as of February 2025. The proportion of gold in total foreign exchange reserves hit 22%, the highest since 1997. However, compared to the peak of over 70% in 1980, it remains about half that level.

Asian central banks are leading these purchases, with Poland becoming the largest buyer in 2024. Interestingly, despite continued large-scale buying by China, the official gold reserve ratio remains only 6.5%. In contrast, the US, Germany, France, and Italy hold over 70% of their reserves in gold. Notably, Russia has significantly increased its gold holdings from 8% in 2014 to 34% in early 2026. Goldman Sachs estimates that China will continue buying about 40 tons per month, amounting to nearly 500 tons annually—roughly half of the total central bank demand over the past three years.

Rebuilding Dollar Hegemony under Trump: Short-term Turmoil and Long-term Impact

President Trump’s return to the White House has brought a fundamental shift in US economic policy. Backed by a political majority, his policies could threaten the very foundation of the dollar-based reserve currency system.

A primary concern is addressing government debt. The DOGE (Government Efficiency Program) initially aimed to cut $1 trillion annually, but realistically, only several hundred billion dollars are expected to be reduced. Currently, the US pays over $1 trillion annually in interest on national debt alone, exceeding the defense budget. This structural deficit is unsustainable and will eventually undermine confidence in the dollar.

Trade policy also faces radical change. New tariffs have pushed the US average tariff rate close to 30%, far above the approximately 20% during the Smoot-Hawley era of 1930. OECD data shows dependence on Chinese inputs is three times higher than China’s manufacturing base, which is three times larger than that of the US. This asymmetry prolongs trade disputes and increases global economic uncertainty.

Regarding dollar policy, the Trump administration views the strong dollar as a cause of industrial hollowing-out and plans significant devaluation. Simultaneously, it aims to maintain the dollar’s status as the global reserve currency. These conflicting goals expose cracks in the dollar hegemony. As a result, the US economy is already showing signs of slowdown, and the Federal Reserve may be forced to adopt more aggressive easing measures than currently priced in.

Fiscal Shift in Europe: What Does Germany’s “180-degree Turn” Mean?

Friedrich Merz, expected to become Germany’s next chancellor, has declared a historic shift in Germany’s fiscal policy. He plans to exempt defense spending exceeding 1% of GDP from debt rules and establish a €500 billion debt-financed program for infrastructure and climate change measures. As a result, Germany’s national debt is projected to surge from 60% to 90% of GDP.

This is not merely a technical change but a formal abandonment of fiscal conservatism across Europe. The moment CDU/CSU, the conservative core, abandons fiscal discipline, fiscal expansion will accelerate throughout the continent. German bonds reacted sharply, recording a significant move not seen in 35 years.

Building a Portfolio for the New Era: Beyond the 60/40 Paradigm

Considering strategic allocations to gold, it is crucial to recognize that the traditional “60% stocks / 40% bonds” allocation is outdated. The new asset allocation proposed by Incrementum is as follows:

• Stocks: 45%
• Bonds: 15%
• Safe assets like gold: 15%
• Performance gold (silver, mining stocks, commodities): 10%
• Commodities: 10%
• Bitcoin: 5%

This reflects a loss of confidence in traditional “safe assets” like government bonds. Notably, the report distinguishes between “safe assets like gold” and “performance gold,” which includes silver, mining stocks, and commodities with high return potential over the coming years.

In periods of unexpected stock market correction, gold acts as a steady cushion, albeit less flashy. Analyzing 16 bear markets from 1929 to 2025 shows gold outperformed the S&P 500 in 15 of those instances, with an average excess return of 42.55%.

Shadow Gold Price: Exploring the “Theoretical Ceiling” of Gold

When evaluating long-term upside potential, the concept of the “Shadow Gold Price” is significant. It represents the theoretical gold price if the base money were fully backed by gold.

Based on current money supply figures, startling numbers emerge:

• If US M0 were fully backed by gold: $21,416
• If Eurozone M0 were fully backed: €13,500
• If US M2 were fully backed: $82,223

Historically, partial backing was standard. The Federal Reserve Act of 1914 set a minimum gold reserve ratio of 40%, requiring gold prices to rise to $8,566 to meet this threshold. Under the 25% backing standard from 1945 to 1971, the Shadow Gold Price is calculated at $5,354.

Currently, gold’s share of the US monetary base is only 14.5%, meaning only 14.5 cents of each dollar are backed by actual assets, with the remaining 85.5% being “air.” During the 2000s bull market, this ratio increased from 10.8% to 29.7%. Reaching similar levels would require nearly doubling the gold price to over $6,000, a precursor to the $8,900 inflation scenario.

Stagflation Scenario: Gold, Silver, and Mining Stocks

If the global economy enters stagflation—simultaneous recession and inflation—how will gold, silver, and mining stocks perform? Historical data provides a clear answer.

During stagflation periods, the average real annual compound growth rates were 7.7% for gold, 28.6% for silver, and 3.4% for the Bloomberg Gold & Mining Index (BGMI). In the 1970s, these figures reached 32.8%, 33.1%, and 21.2%, respectively. This indicates that times of economic downturn combined with inflation are precisely when “performance gold” demonstrates its true value.

Forecast Scenarios for 2030: Base Case and Inflation Case

Incrementum’s 2020 model projects two scenarios for gold prices in 2030:

• Base case: approximately $4,800, with a mid-term target (end of 2025) of $2,942.
• Inflation case: $8,900 by 2030, and $4,080 by 2025.

Currently, gold prices already exceed the 2025 base case. Depending on inflation trends over the next five years, the 2030 price is likely to fall between these two scenarios, suggesting a level around $6,000–$7,000, indicating substantial upside potential.

Coexistence with Bitcoin: Not Competition but Complementarity

As of early 2026, the total market value of mined gold is about $23 trillion. In comparison, Bitcoin’s market cap is approximately $1.9 trillion, about 8% of gold’s value.

Incrementum offers an intriguing forecast: Bitcoin could reach 50% of gold’s market cap by 2030. Assuming a conservative gold price target of around $4,800, this would imply Bitcoin reaching approximately $900,000.

While this may seem ambitious, the report suggests that “competition stimulates business.” Gold and Bitcoin are not necessarily rivals but can be complementary. Under the principle that “gold provides stability and Bitcoin provides volatility (convexity),” combining both assets could generate better risk-adjusted returns than either alone. As geopolitical turmoil deepens, the value of digital assets that operate independently of state control and can be traded across borders will only increase.

Short-term Corrections and Long-term Trends: From $2,800 to $8,900

Even in a bull market, corrections are inevitable. Historical data shows gold has experienced 20–40% corrections during bullish phases. The price fluctuations in early April exemplify this, with a potential short-term dip to around $2,800.

However, such corrections should not be viewed as short-term risks but rather as part of the “breathing” process supporting the long-term bullish trend. Performance gold assets like silver and mining stocks tend to experience larger corrections, requiring investors to maintain consistent risk management strategies.

Multiple potential risks exist: if central bank demand unexpectedly declines from the current quarterly average of 250 tons, the structural demand pillar weakens. Rapid reduction of speculative positions could also occur. If geopolitical premiums diminish (e.g., end of the Ukraine conflict, easing Middle East tensions, early resolution of US-China trade disputes), short-term downward pressure may emerge. An unexpectedly strong US economy could prompt the Fed to tighten interest rates, adding further headwinds.

Convergence Toward 2030: Why Gold Will Ultimately Win

The scenario projected by Incrementum for the end of 2030 is not just a price forecast but a symbol of a fundamental shift in the global financial order. Reaching $8,900 signifies a profound change in confidence in traditional “safe assets” like US and German government bonds.

The pillars supporting long-term gold appreciation are multiple and mutually reinforcing: first, the inevitable reorganization of the global financial and monetary system facing political and economic chaos; second, the structural continuation of inflationary bias by governments and central banks; third, the rise of regions like Asia and the Arab world with a strong affinity for gold; fourth, accelerated capital outflows from US assets (dollars, US stocks, US bonds); and fifth, the materialization of excess returns from performance gold assets (silver, mining stocks, commodities).

The report indicates that the current rise in gold prices is not only a reflection of crisis but also a harbinger of the “Golden Swan Moment.” This is an extremely positive signal amid global turmoil. As confidence in existing currency systems wanes, gold’s role as a traditional currency asset is likely to be restored. In the near future, gold may function as a supranational settlement asset—serving not as a tool of political power but as a neutral, debt-free foundation for trade, exchange, and trust.

Examining the relationship between gold prices and dollar hegemony is not merely an investment decision but an exercise in understanding the future of the global economy.