(Kitco News) - The world is not running out of cash, it is running out of confidence.
That is the central message of the 2025 In Gold We Trust study, released Tuesday by Incrementum AG. Co‑author Ronald‑Peter Stöferle told Kitco News the report concludes that “trust is now the scarcest asset in global markets” and that investors are beginning a “long‑term rotation out of fiat trust and into hard money.”
“More and more people are realizing that some sort of a realignment of our monetary system will take place,” Stöferle said. “We are at a tipping point where gold is becoming the main act on the main stage.”
A macro backdrop of swelling debt and sticky inflation
Federal debt outstanding reached $34.8 trillion on May 23, an increase of roughly $2.6 trillion in the past 12 months, according to daily Treasury data. Interest on that debt is running at an annual pace of nearly $1 trillion, now rivaling total U.S. defense spending.
Investors who once reflexively bought Treasuries at any sign of market stress are wavering. The benchmark 10‑year yield is back below 4.5 percent after last week’s spike, but volatility in recent auctions suggests demand for new government paper is fragile. Meanwhile, the Fed’s preferred inflation gauge, the PCE price index, is expected Friday and may show core prices still rising near a 2.8 percent annual rate, well above the central bank’s target.
Stöferle called the inflation problem “much more sticky than expected” and warned that a second wave similar to the 1970s cannot be ruled out. “If consumers believe inflation will stay high, you can have the best econometric models, it just will not work,” he said.
Gold’s new bull phase, silver and miners in line to outperform
The metal has already set 65 record closes since the start of 2024 and is trading near $3,300 an ounce. Stöferle said the rally is only mid‑cycle. His report’s base‑case model projects $4,800 gold by 2030, with an “optimistic” path that could reach $8,900 if money‑supply growth accelerates or confidence breaks more quickly.
Central‑bank accumulation remains a key prop. Official sector net purchases topped 1,000 metric tons in 2024 for the third straight year, according to the World Gold Council. ”Emerging‑market central banks are hoarding gold like squirrels preparing for winter,” Stöferle said.
He added that Western investors have barely begun to participate. Exchange‑traded gold funds based in North America saw inflows only late last year, while European funds were still net sellers, according to the report. Stöferle expects that to change in what he calls the market’s “public participation phase.”
“Nobody was excited to buy gold at new highs, but every bull market makes many new highs. We think the mania phase is still ahead.”
Incrementum’s model portfolio now allocates 15 percent to “safe‑haven” physical gold and another 15 percent to what it labels “performance gold” - silver and mining equities - on the view that beta plays traditionally outperform bullion in the latter stages of a cycle. It also carves out 5 percent for Bitcoin, arguing that a non‑sovereign digital asset can complement precious metals as an alternative to fiat.
A coming monetary reset?
Stöferle drew parallels to the 1985 Plaza Accord and suggested the next U.S. administration may try to engineer a controlled depreciation of the dollar, possibly including some form of gold repricing.
“China has much more leverage than during Trump’s first term, and a grand global reordering is possible. Gold will play a major role,” he said.
The In Gold We Trust report contends that deficits have become structural, not cyclical, and that traditional 60‑40 stock‑bond portfolios need retooling. Incrementum recommends slashing bond exposure to 15 percent, boosting commodities and keeping a cash buffer for volatility.
Whether investors accept that prescription will depend on whether their confidence in governments and central banks continues to erode. For now, the market’s oldest haven is benefiting from doubt.
“Gold has done a tremendous job,” Stöferle said. “It is both a defensive insurance and, lately, an offensive asset.”
Watch the full Kitco News interview with Ronald‑Peter Stöferle for an in‑depth discussion of the report’s forecasts, its portfolio blueprint and his outlook on gold, silver.