The SPDR Gold Trust (GLD) ETF could have another solid year as Wall Street analysts predicts more gains for gold. GLD, the biggest gold ETF, rose to a record high of $257.93 in October as gold peaked at near $2,800. So, what next for gold and the GLD ETF?
Analysts are still upbeat about gold
Wall Street analysts believe that the price of gold has more upside in 2025 as demand for alternative assets continues rising.
Goldman Sachs analysts expect the price of gold to surge to $3,000 later this year. Societe Generale, on the other hand, sees it moving to $2,900 this year. Similarly, Bank of America and Citigroup analysts see the metal rising to $3,000.
Conversely, Macquarie sees gold remaining in a tight range this year because of the ongoing strength of the US dollar index. It then expects gold to crawl back and show some modest growth in 2025.
The main catalyst for gold price will be the ongoing central bank accumulation. Data released in 2024 showed that global banks accumulated over 694 tons of gold in the year’s first nine months. Most of these purchases are coming from China, where the central bank announced that it was resuming gold purchases after a six-month hiatus.
US public debt is surging
The other crucial catalyst for gold is that the US and global debt has continued surging. For example, public debt has continued soaring in the United States, moving to over $36.3 trillion, a figure that is continuing.
Donald Trump campaigned on the need to lower the debt, but most of his policies will add trillions of dollars to the debt pile. For example, deporting millions of illegal aliens will cost the government hundreds of billions of dollars.
Also, his plans to deliver more tax cuts will worsen the crisis this year. Trump has shifted the debt reduction proposals to Elon Musk, who will lead the Department of Government Efficiency (DOGE) which aims to reduce spending by $2 trillion.
However, cutting government waste will not be easy, as these cuts will need to pass Congress. Even if the government slashed all discretionary spending, the deficit would continue growing because of soaring defense and social security spending.
Therefore, there are chances that gold price will rise as investors and governments worry about the health of the US dollar as a world reserve.
US dollar index and bond yields
The GLD ETF may have some issues this year because the US dollar index is in a strong uptrend. The index has jumped in the last five consecutive weeks and is sitting at its highest level in over two years.
Gold is nearing the important resistance level at $110, meaning that it has jumped almost 10% from its lowest point in 2024. The strong dollar often impacts gold, which explains why the GLD ETF has had outflows in the last two consecutive months. It lost $1.1 billion in November and $522 million in December.
US government bonds have also held steady after the Fed lowered its estimates of the number of interest rate cuts for 2025. It now expects to slash rates two times, instead of the previous guidance of four. The 10-year yield retreated to 4.54%, while the 30-year and 5-year moved to 4.7% and 4.35%, respectively.
GLD ETF analysis
The GLD ETF has remained in a tight range in the past few weeks as the US dollar index rose. It has formed a symmetrical triangle pattern, which happened after a strong surge, a sign that it is a bullish pennant pattern.
The ETF has remained above the 50-day and 200-day moving averages. Therefore, the outlook is extremely bullish. The next point to watch is last year’s high of $257, followed by the psychological point at $300 later this year.
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