One well-established and developed market for investable assets is gold. It is frequently regarded as a safe haven for investment for a number of reasons, despite the fact that it was once a major commodity with significant uses in electronics and jewelry.
Gold is an excellent insurance policy against financial difficulties because it functions as a safe haven asset and frequently moves in an anti-correlation to traditional markets. It has also shown consistent and solid growth in value over an extended period of time.
As its applications and market demand continue to grow, gold is an asset that is known to grow almost continuously instead of experiencing major price fluctuations or high volatility. It is frequently possible to make money over this extended period of time by projecting gold prices for the next ten years.
History of gold prices
Although gold was valued as a precious metal for thousands of years, its use as money did not begin until approximately 550 B.C. Coins made of gold or silver were first carried by people. They could convince the authorities to turn any gold they found into tradable coins.
The Roman Emperor Augustus, who ruled from 31 B.C. to 14 A.D., established the price of gold at 45 coins to the pound, during which it played a significant role. An ounce of gold was worth 0.89 pounds in 1257, according to Great Britain.
However, the majority of nations printed paper money in the 1800s, and their values were secured by gold. The US President Richard Nixon ordered the Federal Reserve to stop maintaining the dollar’s value in gold in 1971, ending the asset’s primary use as a store of value and encouraging it to become more of one. This was known as the Gold standard.
Gold’s price began to soar at $40 an ounce when it was de-pegged from the dollar, but in less than ten years, it increased to $2,249 in relation to the dollar by 1980.
The current price of gold
The price of gold is holding above the support level right now, suggesting that it may be prepared for further rise. A safe haven asset has become increasingly important as worries about an impending recession have contributed to the recent growth surge.
Prior to the rise in recession fears, Gold had been overlooked and made to feel unnecessary during the previous ten years, but this was primarily due to its significant involvement in the 2008 financial crisis. However, the demand for gold as a safe haven asset decreased as the economy improved, and gold’s price began to decline.
Gold has been losing market share to cryptocurrencies like Bitcoin and others that provide comparable advantages, but going forward, it should still be a reliable store of value.
Factors influencing the price of gold
Gold is an asset that is very well-established and mature, so many factors influence its price and how it is affected. Because gold acts differently from other assets like stocks and bonds and because it functions as a protect, it is important to identify factors that affect other assets differently. Gold is also a rather unique asset.
The following is a list of things to take into account: demand for consumption, protection from volatility, inflation, interest rate hikes, a strong monsoon, correlation with other asset classes, geopolitical factors, a declining value of the dollar, and future demand for gold.
Demand for consumption is related to how gold is used as an asset that is taken out of the market. Gold is always in demand, but it has recently seen a rise as more electronics manufacturers are using the metal for conductivity in their products.
Of course, people also use gold as jewelry, and demand for the metal is high, even from international governments who keep it in their central banks as a store of wealth.
A valuable asset for people trying to shield themselves from volatility and uncertainty is gold. People are able to store and maintain it because it is a physical asset. People looking to hedge against uncertainty are drawn to it because of the way its market moves.
Most investors would purchase gold regardless of whether the US economy was expanding or experiencing a recession, highlighting the metal’s allure as an asset in both good and bad times.
Inflation and gold are complementary because, in times of rapid devaluation of money, people would prefer to store their funds in assets that would appreciate in value, such as gold.
Gold thus turns into an excellent inflation hedge instrument against such circumstances when inflation stays high for an extended length of time. This increases the predicted price of gold during the inflationary period.
Similarly, interest rates and gold have an impact on each other. Lower interest rates make saving more difficult and are typically associated with periods of financial instability and government pushes for consumer spending.
But holding gold means that interest rate reductions are avoided and the value of saving is preserved because of the precious metal. In fact, some industry insiders claim that there is typically a negative correlation between interest rates and gold.
It’s interesting to note that there are situations where regional factors, such as the weather, can affect the price of gold. For instance, India consumes 800-850 tonnes of gold annually, with 60% of that amount coming from rural areas. Monsoon therefore has a significant impact on gold consumption because farmers who receive a bumper crop use their earnings to purchase gold in order to build wealth.
One of the things to keep an eye out for is the relationship between gold and the other asset classes because gold is thought to be a very effective portfolio diversifier because of its low to negative correlation with all major asset classes. Gold is also frequently picked up in uncertain times.
Naturally, because the asset has a more stable value during approaching emergencies like war, this precious metal is also used as a hedge during uncertain geopolitical periods. In addition to exerting pressure on the financial markets, these geopolitical tensions also serve to increase the demand for and value of gold.
Interestingly, this is also related to the idea that rising gold prices are a result of a declining dollar. Because gold is mostly traded for dollars, the dollar and gold are closely related. However, due to their inverse relationship, gold prices typically increase when the value of the dollar declines, as a result of inflation, for example.
And lastly, because gold is largely recycled after it is mined and has an unpredictable supply, it becomes difficult to meet demand as demand rises, which sharply drives up the asset’s price.Forecasts for the price of gold in 2024
Given the extreme geopolitical concerns at the beginning of the year, the gold price prediction for 2024 and the gold price prediction for today both appear to be fairly positive.
Gold had been losing ground towards the end of 2022, breaking below the $1650 mark. But as the year turned over, more and more people began gravitating back toward the gold market, pushing it up toward $2000 an ounce in 2023 and beyond.
Given the number of banks that have caused market trepidation, it is anticipated that gold will continue to garner attention in 2024. This comprises Credit Suisse, First Republic, and Silicon Valley Bank. Cryptocurrency has also been the target of fraud, the most notable of which was the now-defunct FTX. As a result, gold is currently attracting far more interest than it has in a number of years.
The majority of larger funds and wealthy investors are adding more gold to their portfolios as calls for a global recession persist because it usually holds value during difficult economic times. The Fed Reserve’s and many other central banks’ ongoing struggles to combat inflation by raising interest rates have made the problem even worse.
Because of this, traders now really worry about defaults, and most look to the gold and bond markets to safeguard their holdings. At this point, it appears that Gold is making every effort to surge higher and reach all-time highs; 2024 is most likely going to be another incredibly volatile year.
In a somewhat paradoxical way, all of the previous money printing made gold desirable. One of the main draws for investors was dollar depreciation, but as the US dollar gained strength, gold began to be used as a means of wealth protection, which indicates that both the US dollar and gold were rising.
Most currencies will suffer greatly from inflation, and this may be the case with the US dollar. Still, given that gold was the first form of money, it stands to reason that it would do well going forward. The 1970s and 1980s saw the last period of inflation this severe for the world economy. Given Gold’s strong performance during that time, it does offer some of the template.
Projected gold prices by 2025 and beyond
It is generally anticipated that capital will keep flowing into the gold market. Pricing power will continue to be supported by central banks’ own purchases of gold. The majority of analysts predict that gold will cost well over $3000 an ounce by 2025.
Given that the market only hit the $2000 per ounce mark in March 2023, it appears there is a lot of momentum. Although some analysts are far more optimistic, $2000 has historically been a significant psychological barrier, so it might be challenging to move above that level.
But if we surpass that threshold, there might be a brief squeeze, which would allow prices to rise significantly by 2025 and most likely even earlier by 2030.
Gold forecasts for the coming years
Numerous forecasts regarding the future price of gold are made because it is a well-known asset that moves slowly and steadily. The mining supply and geopolitical tensions are two examples of uncontrollable factors that need to be taken into account. The demand for safe haven assets and currency inflation are just two of the many factors that support the rise in gold prices.
Additionally depleting Gold’s market capitalization is the narrative surrounding digital Gold. Given how bullish the asset is, the trend is still upward. With Bitcoin’s decline and the delta COVID variety still causing havoc, gold is beginning to recover.
Projected gold price for the next five years, or until 2029
Gold is primarily moving upward, albeit slowly, as previously explained. That being said, gold prices could soar at this crucial juncture and make significant moves that will impact gold price projections for the next five years.
It’s possible that gold is starting to form a bull flag pattern, which would cause prices to soar. Author Richard Kiyosaki, for instance, predicts that the price of gold will reach $5,000 in the coming years in his book Rich Dad, Poor Dad.
Additionally, the majority of analysts and experts have optimistic expectations for the price of gold over the coming years; however, unexpected events make it challenging to predict the price of gold.
Outlook for the price of gold over the next ten years (2030–2032)
Even the gold price prediction chart for the upcoming ten years, which projects gold prices even further ahead, looks promising for the asset. Most people predict that the value of gold will only rise, especially in light of the impending financial crisis.
The global crisis of 2008 is cited by Dohmen Capital Research as an excellent example. As credit became more difficult, the crisis worsened, and there was a run-up to cash from all assets, gold fell by 31%. For bulls who were unaware that a credit crisis sends all assets plunging, that was excruciating. At the bottom, though, it also produced a fantastic buying opportunity.
Longer term trends in gold prices have been bullish overall, but the last few years have seen a significant amount of consolidation. Having said that, it’s extremely unlikely that Gold won’t continue to rise over the next ten years given the abundance of opposing forces operating at the same time.
A gold commodity forecast must consider the fact that many banks will be searching for protection on a global scale, that several of the main central banks from the BRICS+ will be buying gold at a massive volume, and that there are numerous reasons to believe that gold prices will continue to rise.
Future of Gold Prices
| Year | Gold Price Prediction |
| 2024 | $3,000 |
| 2025 | $3,449 |
| 2026 | $4,721 |
| 2027 | $4,988 |
| 2028 | $5,012 |
| 2029 | $8,732 |
| 2030 | $9,126 |
| 2031 | $10,178 |
| 2032 | $10,895 |
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