A market strategist stated that rising bond yields and a relatively resilient economy should not prevent investors from holding gold in diversified investment portfolios.

Before the New Year, Tom Bruce, a macro investment strategist at Tanglewood Total Wealth Management, expressed a "moderate" optimism towards this precious metal as it faces some difficult headwinds.

Bruce pointed out that although he does not have a specific price target, he expects gold prices to rise by about 10% next year, which will keep gold prices below $3000 per ounce.

He said that the biggest short-term challenge facing gold in 2025 will be the increase in real yields and strong growth of the US economy.

He said: "We expect that the yield of 10-year treasury bond will be at the low end of the expected level."

However, Bruce added that although the increase in actual yields may bring some short-term fluctuations, the long-term upward trend of gold still exists because the central bank's purchase of gold has created new momentum for the market.

He emphasized that as central banks diversify away from the US dollar, central bank purchases are far from over.

Bruce said, "During the Cold War, gold accounted for about 30% of central bank reserves. A few years ago, I believed this number was only around 10%. Maybe it won't go back to 30%, but it will go back to 20% or 25%. In the medium term, this is still a huge source of gold demand

Although gold's growth next year may slow down compared to its nearly 30% increase in 2024, Bruce stated that gold remains an important asset for investors.

He also said that his company currently recommends a gold allocation ratio of 9.5% for this year, which is equivalent to an increase in holdings rating.

He said, "This is the highest level we recommend because it is an important portfolio hedge. If everything else goes wrong, gold may perform well. So, we always like to make it a core component

Although the increase in bond yields has raised opportunity costs and most investors are avoiding gold until the end of 2024, Bruce said that many of his clients are willing to hold gold in their investment portfolios.

He said, "There must be some positive sentiment in the market right now. This year is a big year for gold, but at the same time, it doesn't mean it also needs to end.