Chris Mancini, co-portfolio manager of the GLDAX gold fund under Gabelli Funds, said that the war in Iran and the continued rise in military spending in Europe and the United States have jointly created a strong medium-term upward trend for gold, and the target of gold prices reaching $6,000 per ounce is still achievable.



Mancini pointed out on Tuesday that although gold prices have fallen since the outbreak of the conflict in Iran, this precisely reflects the core value of gold in times of crisis, a point that applies to both central banks and individual investors.

“Turkey and Gulf countries may be selling off gold, especially given the disruption to oil exports and the need to cover expenses,” he said. “These countries hold gold reserves, which are currently serving as a highly liquid asset.”

Mancini contrasted gold's easy liquidity with the global resurgence of government debt.

“Gold is a debt-free asset,” he said. “Unlike U.S. Treasury bonds, German bonds, and French bonds, buying gold is not lending to any entity, but rather directly and completely holding an asset; however, buying U.S. Treasury bonds is essentially providing a loan to the U.S. government.”

He added, "As debt and fiscal deficits continue to widen, gold's attractiveness will continue to increase, which is one of the current trading logics. Increased military spending will further reinforce this trend."

De-dollarization is an inevitable trend, and gold is becoming a core alternative.

Mancini emphasized that the Iranian conflict and soaring military spending are compounded by the long-term global process of de-dollarization.

“The de-dollarization of global foreign exchange reserves is undergoing a major paradigm shift,” he said. “After the outbreak of the Russia-Ukraine conflict, the United States effectively froze the U.S. Treasury bonds held by Russia, which is equivalent to the U.S. refusing to repay the loans previously provided by Russia to the United States. This event directly pushed gold prices up from about $2,000 per ounce to around $5,000 per ounce.”

“The US president has repeatedly mentioned the possibility of building a new world order. Against this backdrop, the US dollar will most likely no longer serve as the global reserve currency,” Mancini said. “Countries that maintain a long-term trade surplus need to purchase US dollars and US Treasury bonds, which is essentially a continuous lending to the United States. However, given the current dramatic changes in the global landscape and the gradual formation of a new order, surplus countries may no longer be willing to continue providing loans to the United States.”

"If this is the case, gold will become the primary alternative asset to the US dollar."

Putting aside the current geopolitical conflicts, Mancini remains optimistic about gold prices breaking through $6,000 per ounce in the medium term.

“Gold prices had previously touched $5,300 before retreating due to factors such as a sell-off,” he said. “But once the market situation stabilizes and a new global monetary paradigm takes hold, gold prices will stabilize above $6,000.”

Spot gold continued to fluctuate on Tuesday, falling to a daily low of $4,607.72 per ounce after 10 a.m. Eastern Time before rebounding.

At 02:07 Beijing time, spot gold was trading at $4,678.92 per ounce, up 0.61% on the day.