Why Bond King Jeff Gundlach Says Record-Setting Gold Is Poised for Another 20% Rally
The comments below are an edited and abridged synopsis of an article by Jennifer Sor
Gold Poised to Climb as Investors Embrace It as A Core Asset Class – Jeff Gundlach’s $4000 Prediction
Gold’s momentum shows no signs of slowing, with DoubleLine Capital CEO Jeff Gundlach predicting a potential surge to US$4,000 per ounce. Despite already rising 25% year-to-date, Gundlach believes gold’s upward trajectory is far from over. Speaking to CNBC, the renowned investor—often dubbed the “Bond King”—explained that market sentiment around gold is shifting. No longer seen merely as a speculative instrument or survivalist hedge, gold is increasingly being treated as a core asset class in response to mounting global uncertainty.
According to Gundlach, heightened geopolitical tensions, escalating trade disputes, and ballooning sovereign debt levels are all driving investors towards gold as a “true monetary asset.” This shift in perception is notable and signals a broader re-evaluation of gold’s role in diversified portfolios.
Supporting this shift, the World Gold Council reported an $11-billion increase in physically backed gold ETFs in April alone, pushing global assets under management to $397 billion. This surge reflects growing institutional interest in gold as both a store of value and a hedge against broader economic risks.
In a recent Bank of America survey, 58% of global fund managers named gold the safest asset in the event of a full-scale trade war. This consensus highlights gold’s increasing relevance amid fears of financial instability.
Beyond gold, Gundlach expressed concern over the outlook for risk assets, particularly equities. He warned of a potential correction in the stock market, suggesting the S&P 500 could decline as much as 20%, to 4,500 points. “We’re in a risk-off environment on an intermediate-term basis,” he noted, underlining his defensive stance.
Gundlach’s bullish outlook on gold aligns with recent projections from other major financial institutions. Goldman Sachs raised its gold price target to US$3,700, attributing the revision to elevated policy uncertainty and signs of an economic slowdown in the US. Bank of America and UBS also forecast gold reaching US$3,500, suggesting a 4% upside from current levels.
As investors grapple with unpredictable macroeconomic forces and seek refuge from volatility, gold is becoming more than just a crisis hedge—it is emerging as a long-term strategic asset. With central banks and global institutions increasing their allocations, the groundwork for a sustained rally appears to be in place.
If Gundlach’s forecast holds true, the next few years could see gold transition from a niche safe haven to a mainstream portfolio cornerstone, reaffirming its status as one of the most resilient and enduring assets in the global financial system.
