Gold Price Predictions for Next 5 Years: Will Gold Continue to Go Up?
If you’re looking for the gold price predictions for next 5 years and want to know what the gold price will be in 2023, 2025 and 2030, you’re in the right place. In this article, we will dive into the gold price forecasts for both short term and long term.
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Gold prices surged to near all-time highs in early May, touching the $2,067 mark for the first time since March 2022.
Previously, the gold price was supported by investor anxiety over the banking industry caused by the shuttering of Silicon Valley Bank and Credit Suisse’s implosion. Investors have been flocking to gold and Treasurys amid the banking fallout.
Will the gold price maintain bullish momentum as investor sentiment shifts to risk-off, and what’s the long-term outlook for the yellow metal? Here we take a look at the gold price predictions for next 5 years.
A brief glance at gold investment
Gold was first discovered by Ancient Egyptians over 4,000 years ago. Throughout centuries the rare precious metal was used as a store of value and showcase of wealth. In the modern day and age, gold’s demand has expanded to industrial use, most notably in production of electronics.
Gold is a highly influential commodity in the global economy. As with many commodities, gold’s price is highly shaped by the forces of supply and demand. Yet the yellow metal is also seen as an investment asset, preserving value throughout centuries. Some investors use gold as a safe-haven asset during economic recessions or periods of uncertainty, or as a hedge against inflation.
Historically, periods of high inflation have been positive for the gold’s price, as investors tend to flee from fiat currencies towards the yellow metal. Hence monetary policy by central banks in controlling inflation is key in driving the gold’s price. Gold’s all-time high was $2,075 in August 2020.
As a tradable commodity, gold is denominated in the US dollars, which creates an inverse relationship with the greenback. When the US dollar rises against other currencies, gold becomes more expensive, which hurts demand. When USD falls, on the other hand, this boosts the gold’s price as the metal becomes cheaper for overseas buyers.
Gold can be bought as a bullion in its physical form, or traded through financial derivatives. Some investors choose exposure to gold-mining stocks, or gold-linked exchange-traded funds (ETFs).
Gold is also used to produce jewellery, which is especially popular in China and India – some of the world’s biggest buyers – for festivals and weddings. The biggest gold importers in 2021 were Switzerland, India, the UK and China, according to Statista.
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From late 2022 to 2023: Gold prices reverse trend and regain momentum
In late 2022 and the first weeks of 2023, gold price saw a trend reversal to bullish momentum, enjoying a series of higher highs and higher lows. The gold’s price rose by 14% from November 2022 to early February 2023, supported by a less hawkish tone by the US Federal Reserve’s (Fed’s) Jerome Powell. Plus, the reopening of China’s economy and hence stronger jewellery demand boosted the price at the start of 2023.
Gold passed the $2,000 mark in March amid the turmoil in the banking sector resulting after the Silicon Valley Bank collapse, forcing investors to seek safe-haven assets. The precious metal continued the bullish momentum, reaching the peak of $2,067 intraday on 4 May as concerns about the US debt ceiling combined with the US Fed’s signalling a pause of tightening fuelled demand for gold.
It is worth noting that investors aren’t the only ones who see gold as a hedge against economic downturn and inflation. Another factor that made gold one of the most preferred investments has been the action of central banks around the world.
Demand for gold skyrocketed to an 11-year high in 2022, owing to “colossal central bank purchases,” according to data from World Gold Council, with Turkey, Uzbekistan and Qatar among the biggest buyers. Central banks bought a 55-year high of 1,136 tons of gold last year. The renewed appetite has boosted gold’s price since the end of 2022.
Gold price was supported by US debt ceiling concerns
The debt ceiling in the US serves as a limit to the amount of debt the federal government can amass. The nation’s constitution mandates that the Congress approves any debt issuance, which in turn empowers the government to fund legally binding obligations such as Social Security, Medicare benefits, military wages, interest on the national debt, tax refunds, and other disbursements.
In May 2023, a deadlock transpired over the issue of the debt ceiling between the Democratic and Republican parties. The Republicans advocated for a rollback of spending to the levels of 2022 as a prerequisite for increasing the debt ceiling. On the other hand, Democrats were in favour of an “unencumbered bill”, devoid of preconditions. The Treasury Secretary, Janet Yellen, cautioned that the impasse over the debt ceiling has led to an increase in the cost of government borrowing. She further indicated that the US could deplete its cash reserves as soon as the beginning of June.
As explained by Michael Pearce, Lead US Economist at Oxford Economics:
“Negotiations over the debt ceiling kicked into a higher gear, but both sides are still far from an agreement. With the Treasury potentially running out of cash by early June, the chances of a disorderly and damaging default are rising. Even if default is averted, the odds are high that any final deal includes cuts to federal spending, which would weigh on the economy.”
Meanwhile, Russ Mould, AJ Bell’s investment director, noted that the ever-growing US federal deficit and the debt-ceiling debate on Capitol Hill will be the key point of gold-supporting investors. He said:
“Gold bugs will be on the look-out for any signs of higher spending and higher deficits as justification for their faith in the precious metal as a store of value at a time of fiscal incontinence and after an extended period of money printing.”
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Banking crisis also boosts gold price
Another catalyst in supporting the safe-haven’s demand in 2023 was the Silicon Valley Bank’s collapse, the most prominent banking failure since the 2008 financial crisis. The struggling bank was heavily invested in US government bonds, which have declined in value amid rising interest rates. To cover customer withdrawals, Silicon Valley Bank had to sell off the bonds, resulting in liquidity issues, as more and more clients withdrew their funds due to worries about liquidity.
Troubles in the banking sector continued as Credit Suisse acknowledged “material weaknesses” in its booking, which led to the rescue takeover by rival UBS, a bid that resulted in $17bn of Credit Suisse bonds turning worthless. This has caused further alarm in the markets, damaging investor confidence in banking stocks.
To restore the sentiment, several central banks, including the US Fed, European Central Bank (ECB), and the Bank of England (BoE) have taken a joint action to inject USD liquidity into the markets, echoing the steps taken during the 2008 financial crisis and Covid-19 outbreak.
Other factors affecting the gold price in 2023
Apart from the banking sector and the US debt ceiling, the gold market narrative has been driven by the contrasting effects of persistently high inflation and central banks, particularly the US Fed, raising interest rates to battle soaring consumer prices.
The US central bank has hiked rates seven times in 2022, and so far three times in 2023, bringing the rate to between 5% and 5.25%, the highest level in 16 years. The monetary policy decisions by the US central bank are likely to continue shaping the gold price in the next 5 years.
In their gold market outlook as of May, ANZ Research pointed out:
“Macroeconomic developments continue to present a bullish backdrop for the gold market. With the US Fed nearing the end of its rate-hiking cycle, concerns around the US economic outlook could propel safe-haven demand.”
Plus, the price of gold has been largely influenced by the US dollar, which benefited from monetary tightening. The Dollar Index (DXY), which measures the dollar’s performance against a basket of other currencies, peaked at 114.68 in late September 2022, but has since fallen back by over 10%, as of May 2023.
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Gold price predictions for next 5 years: Gold price prediction 2023
A gold price forecast from TradingEconomics as of 11 July expected the commodity to trade at $1948.17 by the end of this quarter. The website’s macro models and analysts’ expectations saw the gold price rising to $2020.35 in 12 months’ time.
ANZ Research upgraded its latest gold price forecast, citing US banking sector issues, high interest rates, and uncertainty around the debt ceiling as the primary drivers of safe-haven demand. Plus, ANZ mentioned the central banks’ gold purchases, which totalled 228 tonnes in Q1 2023, and monsoon season in India, which could lift gold buying in the second half of the year.
ANZ Research anticipated the gold price trading at $2,000 by the late 2023, accelerating to $2,075 by September 2024. ANZ Research didn’t provide a gold price forecast for 2025.
Craig Erlam, a senior market analyst at foreign exchange company Oanda, agrees with ANZ’s buoyant outlook.
“I think it’s very plausible that we see a strong performance in gold over the coming months. The stars appear to be aligning for gold which could see it break new highs before long,” he said.
Gold price predictions for next 5 years: Gold price prediction 2025
Continuous market turbulence is making it difficult to conduct a realistic gold forecast for the next 5 years.
Gold price prediction 2025 is largely an extrapolation of the influential factors in the current year. At the beginning of the year, Goldman Sachs indicated that the commodities bull market observed in the past year will likely continue into the current year and beyond. Indeed, the investment bank holds that the commodities supercycle will last for about 10 years.
Based on this narrative, Gold price may reach a new all-time high of $2,200 by 2025. In addition, a tighter Fed policy and subsequent decline in economic growth will likely boost its performance as a risk-on investment asset.
However, even with the bullish gold price prediction 2025, competition from Bitcoin as a store of value may limit its upward potential.
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Gold price predictions for next 5 years: Gold price prediction 2030
Due to the existing inverse correlation, a feasible gold price prediction 2030 is founded on US dollar movements. In a scenario of geopolitical tensions, gold may find some support in its status as a safe haven. However, its upward momentum may be limited by rising demand for the greenback.
Over the past eight years, gold price has risen about 60%. However, an assumption that the bull market will continue over the next eight years makes a 50% surge viable. In this case, the gold price forecast for 2030 will be for the precious metal to hit a high of about $2,700 per ounce.
Gold price predictions for next 5 years: Conclusion
Gold prices have more room to run as global banks struggle and the U.S. Federal Reserve renders another interest rate decision, potentially breaking all-time highs — and staying there.
Some investors may opt to keep some exposure to gold in their portfolio for diversification, as a hedge against a fall in stocks and bonds.
However, please note that analysts’ and algorithm-based gold price forecasts should not be used as a substitute for your own research and and due diligence. Commodity markets remain volatile and shaped by the constant changes in economic and geopolitical events.
It’s essential to always conduct your own research before trading, looking at the latest news, a wide range of commentary, fundamental and technical analysis.
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Is it a good time to buy gold?
If your goal is to use gold as security, timing is less important than for the speculative approach, as this is a longer term strategy. If you agree with the view that gold’s value as part of a portfolio is to guard against shocks to other investments, then any time would be a good time to buy gold.
Is gold still a good investment 2023?
Yes. Some experts think gold prices will continue rising as inflation persists and the economy remains uncertain.
Will gold rate decrease in coming days?
From gold’s price chart, its initial support is found at the $1920 price level. It is crucial for buyers to defend this support because a breach below this level could lead to further declines, potentially pushing the gold price below $1900.
How much has gold price risen over the last year?
In 2022, the price of gold stayed flat, increasing only slightly by 2%.
Will gold go up in the next 5 years?
Fitch Solutions’ gold price predictions for next 5 years predicted that the gold bullion would fall beyond 2023 as the global economy would recover and the Russia-Ukraine war would resolve, while algorithm-based price forecasting service WalletInvestor was bullish in their predictions, seeing the metal trade at $2,026 in 2025 and rise to $2,257 by January 2028.
What will gold be in 2023?
ANZ Research forecasts gold to trade at $2,000 at the end of 2023 and accelerate to $2,075 by September 2024, citing a pause of Fed’s interest rate hiking cycle and weaker USD as the primary reason for the upgrade.
What is the gold price prediction for 2025?
According to Goldman Sachs, the commodities bull market observed in the past year will likely continue into 2023 and beyond. Indeed, the investment bank holds that the commodities supercycle will last for about 10 years. Based on this narrative, gold price is expected to reach a new all-time high of $2,200 per ounce by 2025.
What will gold price be in 2030?
Due to the existing inverse correlation, a feasible gold price prediction 2030 is founded on US dollar movements. Given that the gold price has risen about 60% over the past eight years, a 50% surge is feasible assuming the bull market will continue for the next eight years. In this case, the gold price forecast for 2030 will be for the precious metal to hit a high of about $2,700 per ounce.
What factors affect gold price?
The price of gold is driven by a number of factors, mainly including the strength of the U.S. dollar, physical and investment demand for the precious metal, and the health of the global economy. Gold is seen as a safe-haven asset, which rises during times of economic uncertainty, and is used by some investors as a hedge against inflation.
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