According to a report by CNBC TV-18, market guru Ed Yardeni forecasts a bullish long-term trend for the S&P 500 and gold prices, which might reach the 10,000 level by 2029.
Yardeni's comments coincide with spot gold hitting a record high of $4,383.73 per ounce on Monday, December 22. His goal is for the price of gold to increase by more than two times from its current levels. Strong demand for safe havens, trade and geopolitical tensions, significant central bank purchases, a weakening dollar, and anticipations of rate reduction by the US Federal Reserve have all contributed to the yellow metal's 67% increase this year.
What may we anticipate in the near future?
The President of Yardeni Research also selected a short-term benchmark for the US benchmark equity index in an interview with the news site, predicting that it will reach 7,700 by the end of 2026. The S&P 500 is currently up 16.2% year to date at 6,834.50, indicating that Yardeni's 2026 objective offers a potential gain of almost 13%.
According to Yardeni's projection for 2026, the S&P 500 would climb by double digits for the fourth consecutive year.
As part of his "Roaring 2020s" thesis, Yardini explained his long-term perspective on gold and the S&P 500 by saying, "What I've seen if you put the two on the exact same chart with the same scale, what you see is that the gold and the S&P 500 tend to be inversely related on a short-term basis, which makes gold a good way to diversify a US stock portfolio.”
His dual 10,000 target for the end of the decade is the outcome of the "almost identical" long-term trend.
Market volatility for AI
Yardeni believes the AI market will be more volatile in 2026. He points out that because of AI, the "Magnificent 7" stocks, which formerly functioned as autonomous kingdoms, are now directly competing. Spending is predicted to increase as a result of this growing competition, which will help other IT companies that provide these big players with infrastructure and services.
Regarding emerging markets, Yardeni described 2025 as a year of "consolidation" for the Indian stock market following a number of years of superior performance.
He said that if trade talks with the US are settled, 2026 would be a better year, with the market perhaps hitting new highs. Yardeni made it apparent that she preferred China over India.
He stated, "There are opportunities to invest in both China and India, but I prefer to invest in India because I like the legal and corporate system better than what I see in China."
Regarding the Bank of Japan's rate decision
Yardeni talked about the Bank of Japan's latest interest rate hike, pointing out that its current impacts appear to be limited. He described Japan's present strategy as a "highly contradictory fiscal and monetary policy," with the government pushing for significant fiscal spending as the central bank tightens owing to concerns about inflation.
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