US debt could drive gold price to $6,000, analyst says

Gold could climb to $6,000 per ounce as swelling U.S. debt and central-bank buying extend the metal’s bull market, Toronto-based brokerage Maison Placements President John Ing forecasts in a paper released Thursday.

The call rests on $39 trillion in U.S. federal debt, about $1 trillion of which is annual interest costs and steady official-sector demand. Ing favours producers with near-term growth, including Lundin Gold (TSX, Nasdaq Stockholm: LUG), whose Fruta del Norte mine lies about 400 km south of Quito in southeastern Ecuador.

“While gold’s two-year rally has taken a pause that refreshes, we believe that this bull market has only just begun,” wrote Ing, a 50-year veteran in investment banking and owner of Maison Placements Canada. “We continue to expect gold to reach $6,000/oz as part of its multi-year bull market.”

The yellow metal has gained about 68% since 2024, one of the strongest rallies for gold in the modern era and which has materially changed the economics of formerly marginal projects. A sustained rise toward $6,000 per oz. would widen miners’ margins, swell free cash flow and spur acquisitions as producers struggle to replace reserves, Ing said.

Debt pressure

The dollar’s share of global reserves fell to 54% in the first quarter of last year from 71% in 1999, according to Ing. Foreign investors own almost $10 trillion of the $32-trillion U.S. Treasury market, leaving Washington exposed if overseas demand weakens as federal borrowing grows.

But Ing argues the Federal Reserve cannot support Treasury demand by expanding the money supply without fuelling inflation. U.S. broad money has risen nearly fourfold since May 2000 to $23 trillion, pushing more capital into financial and hard assets, he wrote.

Central banks bought 244 tonnes of gold in the first quarter and another 41 tonnes in May, their largest monthly addition since November. China added almost 15 tonnes for a 20th straight month, lifting its holdings to 2,346 tonnes at the end of June. Poland bought 82 tonnes during the first half.

Beyond buying more bullion, some governments have also begun moving physical gold from New York and London vaults to cut their exposure to sanctions and political risk. The shift will not displace the dollar anytime soon, but it gives bullion a stronger role as countries spread reserves among more currencies and assets, in Ing’s view.

Miner picks

Ing rates Agnico Eagle Mines (TSX, NYSE: AEM), B2Gold (TSX: BTO; NYSE-A: BTG) and Endeavour Mining (TSX, LSE: EDV) as strong buys. He gives buy ratings to Barrick Mining (TSX: ABX; NYSE: B) and Lundin Gold.

Maison Placements does not publish the value of client assets and says clients make the final decisions in its advisory accounts.

Ing expects Agnico to produce about 3.4 million oz. this year at all-in sustaining costs of $1,400 an oz. while advancing Hope Bay in Nunavut and expanding around Kittilä in Finland.

Barrick offers exposure to Nevada Gold Mines, Pueblo Viejo in the Dominican Republic and the high-grade Fourmile discovery in Nevada. Ing expects about 3.1 million oz. of production this year at all-in sustaining costs of $1,600 an ounce.

Lundin Gold should produce 475,000 to 525,000 oz. this year at all-in sustaining costs of about $1,100 per ounce.

B2Gold’s Goose mine in Nunavut has poured first gold, though a crusher fire delayed the ramp-up to full capacity. A long-awaited permit for satellite deposits near its Fekola mine in Mali could add 70,000 oz. a year.

Endeavour produces about 1.2 million oz. a year from mines in Senegal, Burkina Faso and Côte d’Ivoire. Its Assafou project in Côte d’Ivoire is expected to add about 330,000 oz. annually from 2028, giving it one of the stronger growth pipelines among mid-tier producers.

Ing rates Kinross Gold (TSX: K; NYSE: KGC) a hold. He rates Centerra Gold (TSX: CG; NYSE: CGAU), Iamgold (TSX: IMG; NYSE: IAG) and Newmont (NYSE, ASX: NEM) as sells. Eldorado Gold (TSX: ELD; NYSE: EGO) carries his lowest rating because it faces construction and ramp-up risk at Skouries in Greece and McIlvenna Bay in Saskatchewan.

Ing or an associate holds securities in Barrick, B2Gold and Endeavour, according to the report’s disclosure.