$3,000 is the new normal for gold, says abrdn’s Robert Minter - here’s why

July 2, 2025

NEW YORK (July 2) Gold prices are consolidating above $3,300 but are struggling to build new bullish momentum as investors try to get comfortable with these elevated levels. However, one fund manager argues that the value is completely justified.

In an interview with Kitco News, Robert Minter, Director of ETF Strategy at abrdn, said that while gold continues to tread water, it is difficult to see any significant weakness as U.S. debt continues to grow out of control.

Last week, U.S. debt surpassed a new milestone, exceeding $37 trillion. While the size of the U.S. debt is attracting attention, Minter noted that the U.S. is not alone, as Europe has ramped up its spending in recent months.

“I went back to 1993 and looked at the amount of U.S. Treasury debt outstanding. Since then, it's up about 900%—which is roughly the same as gold’s increase over that period,” he said. “Now, if the U.S. increases its debt by 900%, then if you're in Europe, you have to do the same thing, or you're going to get huge currency distortions that will impact trade and the economy.”

Minter noted that because nations around the world are all engaging in deficit spending at a similar pace, currency devaluation isn’t immediately visible. However, he added that it is showing up in gold, as the precious metal continues to trade near record highs against all major global currencies.

“Gold is the only currency that is not someone else’s debt. Gold’s value above $3,000 is completely justified by the level of debt around the world,” he said. “It is unlikely gold will ever fall materially below $3,000 again.”

Minter added that in this environment, he expects central banks to continue buying gold, even if the pace slows compared to the last three years.

While Minter is bullish on gold in the long term, he also sees growing near-term risks. He pointed out that economic pessimism is currently as bad as it can get, and an unwind of this sentiment could tarnish gold’s role as a safe-haven asset.

However, he added that any short-term correction should be seen as a buying opportunity. He said investors should continue to watch the Federal Reserve for signals that could ignite a new gold rally before the end of the year.

Although the Federal Reserve has been reluctant to cut interest rates this year, Minter said it's only a matter of time before they are forced to act. He noted that two-year yields are currently around 3.78%, well below the Fed Funds rate.

“The bond market is telling us that interest rates are too tight by about 80 basis points, so there is a strong case that the Federal Reserve could be forced to cut rates by at least 50 basis points this year,” he said. “The next leg of gold’s rally will come from traditional investment demand as the Federal Reserve begins to ease interest rates.”

According to the CME FedWatch tool, while the probability remains low, there are growing expectations that the Federal Reserve will cut rates later this month. However, markets have fully priced in easing in September and December.

As for how much potential gold has in the second half of the year, Minter said that using last year as a roadmap, gold prices could rally $300 an ounce when the Federal Reserve starts cutting again—bringing prices within sight of $3,700 an ounce.

“Between June and September last year, there was a decent-sized uptick in ETF demand ahead of the Federal Reserve’s expected rate cut. We also saw a pretty good rise in price, from $2,300 to $2,600,” he said. “I think we could see another $300 rally in gold as ETF investors come back in because of rate cuts.”

KitcoNews

Gold Eagle twitter                Like Gold Eagle on Facebook