Investors urged to buy gold as price surges

Precious metal set to continue to boom

- NUNTAWUN POLKUAMDEE

DBS Vickers Securities recommends investors increase their exposure to gold and reduce their allocation of government bonds from developed economies, predicting the bullion price will hit US$3,765 an ounce by the fourth quarter of this year.

Wey Fook Hou, chief investment officer at DBS Bank, noted that the first 100 days of US President Donald Trump's second term sent shockwaves across global markets, especially by escalating a global tariff war.

While these moves aim to reposition the US geopolitically, ongoing policy uncertainty is raising the risk premium on American financial assets. In addition, the recent passage of sweeping tax reforms has intensified worries about the long-term fiscal stability of the US.

According to the Congressional Budget Office, the US federal budget deficit is projected to reach $1.9 trillion this year, with debt levels rising to 118% of GDP by 2035. Moody’s downgrade of US sovereign credit to Aal, with 30-year bond yields exceeding 5%, underscores rising investor anxiety over the sustainability of US fiscal policy.