Gold is in a “new bullish phase” after prices hit another record high, asset management firm Sprott Asset Management said, joining other analysts who have predicted gold prices will continue to reach new heights.

“Gold has entered a new bullish phase, driven by factors such as central bank purchases, rising U.S. debt and a possible peak in the U.S. dollar,” wrote Paul Wong, market strategist at Sprott Asset Management, in a note after the price of gold The yellow metal rose to a new record of $2,700 an ounce on Monday.

Find gold is currently trading at $2,729.14 per ounce Gold futures are at $2,741.20.

“Rising U.S. debt-to-GDP ratios have historically led to higher gold prices due to concerns about debt sustainability, currency devaluation and debt monetization,” Wong continued.

The US Congressional Budget Office projects that national debt will rise from 98% of GDP in 2023 to 181% of GDP in 2053, the highest level in the country's history.

As debt increases, governments may resort to printing money to make up deficits, which can lead to currency devaluation, Wong explained. This loss of trust in fiat currencies increases gold's appeal as a reliable store of value.

The ongoing inflationary pressures and difficult macroeconomic conditions plaguing the global economy suggest that central banks and investors are more likely to invest in precious metals, he added.

According to the World Gold Council, net purchases of gold by central banks rose to 483 tons in the first half of 2024, 5% above the previous record set in the first half of 2023.

A growing number of analysts have predicted gold prices will continue to rise to $3,000, with some expecting the commodity to surpass $2,800 in the next three months.

Gold prices “look better now” than ever before, said Michael Widmer, commodities strategist at Bank of America. “I think we’re closer to 3,000 pounds.”

Widmer cited increased national debt and the looming geopolitical uncertainty as reasons for his optimistic outlook.

Promises by Israel and its opponents Hamas and Hezbollah to continue fighting in Gaza and Lebanon have dented hopes for a solution to the ongoing conflict in the Middle East.

Rising geopolitical tensions typically cause investors to flock to safe havens like gold, motivated by a desire to hedge against risk and instability in global markets.

Citi analysts also maintained their assessment that gold prices will reach $3,000 in the next six to nine months. If oil prices rise due to a short-term escalation in the Middle East, gold prices are likely to rise, they added.

Despite a decline in Chinese retail demand over the past three months, gold prices have still performed “extremely well,” reflecting buyers' willingness to pay higher prices, according to Citi.

Meanwhile, Commonwealth Bank of Australia's Vivek Dhar said in a note on Monday that he expects gold prices to average $3,000 in the fourth quarter of next year due to “ongoing weakness in the US dollar”.

Still, Dhar said he expects gold prices to average $2,800 this quarter. Citi recently adjusted its assessment and forecast that gold prices will reach $2,800 in three months.