Gold Price Predictions: A Forecast for 2023, 2024, And the Future

Will the gold price ever power through the $2,000 an-ounce level again in 2023 or in 2024? That’s the million-dollar question as the precious metal has struggled to rise above the crucial psychological level, three times on the bounce. It, therefore, does not come as a surprise that there is a manner of mixed sentiment on the gold price prediction for 2023, with the metal having clocked a record high in the first half of the year and then pulling back significantly.

With each push to the $2050 area, a steep selloff has always ensued, resulting in a deep correction. With a new record high already recorded in the first half of 2023, will the gold rate decrease in the coming days, or will gold prices go up?

Those are some of the big questions in investment circles as the precious metal remains in a precarious position and at risk of plunging below the $1900 an ounce level amid US dollar strength. Consequently, gold price predictions for 2023 vary widely as analysts and strategists hold divergent views regarding the multiple factors in play.

Central Bank’s monetary policy uncertainties, recession risks, foreign country reserve holding sales and purchases and dollar strength continue to weigh heavily on the precious metal’s outlook and price sentiment. Talk of another global currency to counter the dollar’s strength is another factor that weighs heavily on future gold price predictions.

Gold Price Action: Strong Resistance at $2080 Area

Demand for gold surged in 2020 at the height of the pandemic as investors rushed to the metal as a safe haven and storage for wealth. Gold prices powered through the critical $2000 level for the first time in history. After reaching a record high of $2075, a deep pullback followed suit at the time that saw the metal drop to lows of about $1676.

What followed was another push to the upside resulting in gold rallying to highs of $2049 in March of 2022. A rejection at the key $2049 area resulted in the precious metal dropping to lows of $1630 in November. The deep pullback was followed by yet another strong push to the upside, resulting in gold powering to highs of $2046 in April of 2023.

The brief push to above the $2,000 level represents the yellow metal’s highest level for the year, going by the previous year’s price action activity. The market has already started adjusting to dynamic interest rate expectations and a resilient US economy that could give the US Federal Reserve the much-needed leeway to carry out further hikes, something that could hurt gold prices further.

The rally to record highs of $2046 in the first half of 2023 was mostly fueled by the banking crisis in the US that culminated in JP Morgan acquiring First Republic assets. The banking crisis triggered risk aversion forcing investors and traders to seek safety in safe havens like gold while shunning riskier assets like stocks.

Fast forward to the present time, the move to the upside has cooled off, and yet again, gold has turned bearish. The price of the precious metal has traded in a tight trading range of between $1900 and $1950 for the better part of the year and looking likely to drop below the $1900 an ounce level before year end.

Why is the gold price going down? That’s the big question, as gold has yet again struggled to find support above the $2,000 level. After achieving another record high, gold prices have dropped and remain subdued in the $1900 to $1950 trading range affirming a strong selloff above the $2,000 level.

How to Forecast the Price of Gold

The gold price has ranged from $1,811 – $2,053 in 2023. A variety of factors move gold prices. This includes the global supply of the yellow metal, interest rates, the dollar’s strength, and geopolitical events.

As you can expect, a tight supply of gold has the effect of driving up the metal’s price. While disruptions in mining operations can limit gold supply, strong demand for the precious metal is a major cause of supply constraints. In recent years, gold’s increasing use in industrial applications has been a major source of demand, resulting in supply challenges that have driven the price up.

As for interest rates, gold competes with bonds, stocks and high-yield cash savings accounts as investments. When interest rates go up, bonds, high-yield savings accounts and other investments become more appealing than gold. That causes gold prices to dip as investors pull out their funds to pursue yield-bearing investments.

A stronger U.S. dollar makes gold more expensive to purchase for those using foreign currencies. As a result, a stronger dollar tends to weigh gold prices down as it reduces demand for the yellow metal.

Geopolitical tensions tend to drive more investors to gold, which causes the metal’s price to jump. The elevated gold prices in 2023 can also be partly attributed to the conflicts in the Russia-Ukraine war in Europe and the Israel-Hamas war in the Middle East.

With so many factors impacting the gold price, it can be challenging to forecast the price of gold. However, technical analysis can provide clues about where the gold price could be in the future.

Let’s examine what technical indicators suggest about the gold price outlook.

The chart below shows the gold price trend over the past 5 years alongside its 20-day, 50-day, 100-day, and 200-day exponential moving averages (EMA).

Looking at the graph, you will detect that there are times when the spot gold price is above its moving average, and other times it is below the moving average.

When the gold price climbs above its 20-day EMA, that now becomes its support level and the price can surge higher. When the gold price breaks below the 20-day EMA, the 50-day EMA becomes the support level. When the price drops below the 50-day EMA, the 100-day provides the support level. When the price sinks below 100-day EMA, it finds support at the 200-day level. Gold price rarely breaks below its 200-day EMA.

Therefore, you ascertain a hint about where the gold could be next by looking at its current price relative to its moving averages.

The Evolution of the Gold Price: Movements Over Time

While the use of gold as an industrial material is on the rise, much of the demand for gold still comes from investors and central banks holding the yellow metal as a store of value.

In much of history, demand for a store of value has driven gold prices. With gold considered an excellent conductor in electronic components, industrial demand could have a significant impact on the gold price in the future.

That said, let’s see how gold prices have evolved over the years with a focus on the major price milestones.

  • 1969 -1972: Gold price was at $35 at the close of 1969. By the end of 1972, it had hit $65. In that 4-year period, 1972 was the best for the yellow metal as its price soared nearly 50% that year.
  • 1973 – 1978: The gold price first crossed $100 in 1973 and surpassed $220 for the first time in 1978.
  • 1979 – 1980: Gold closed 1979 at $524, a price milestone for the precious metal. The yellow metal continued to see strong demand, driving its price to nearly $590 at the close of 1980.
  • 1981 – 2004: This was a period of consolidation for the gold price. After coming close to $600 in 1980, the gold price dipped to $400 in 1981. It attempted to break above $400 in some years but struggled to keep the gains. In 2001, the gold price came down to as low as $250.
  • 2005 – 2008: After previous years of consolidation, this was a breakout period for the gold price. The yellow metal’s price jumped above $510 in 2005 and continued to rise, reaching $865 in 2008.
  • 2009 – 2019: This was another milestone period for the gold price. The precious metal’s price closed consistently above $1,000 in this 10-year period.
  • 2020 – 2023: The gold price hit a milestone above $2,000 in 2020. Many investors turned to the precious metal as a store of value amid the global economic uncertainty caused by the Covid-19 pandemic. While the gold price has retreated from its peak, it remains elevated in 2023 as geopolitical tensions in Europe and the Middle East have kept many investors in a cautious mode toward gold.

Gold Price Forecast for the Rest of 2023

If history is anything to go by, the gold outlook looks increasingly bearish.

  • Prices have already started drifting lower, recording similar movements recorded in previous years when it tried and failed to power through the $2,100 level.
  • Prices have also dropped significantly in the face of higher interest rates.

Solid economic data in the US depicted a resilient labor market growing retail sales, and a booming manufacturing sector has eroded the prospects of the US Federal Reserve (FED) cutting interest rates.

Over the years, gold has always had a negative correlation with interest rates. A rising interest rate environment has always triggered dollar strength, further triggering a significant decline in gold prices.

Likewise, in the face of rising interest rates, traders seek refuge in bonds to take advantage of the higher yield at the expense of the precious metal.

While the FED has paused interest rate hikes on concerns that further hikes could tip the US economy into recession, the prospects of cuts are diminishing by the day. As it stands, the US looks set to remain in the high-interest rate environment until next year.

Economic data has affirmed the health of the US economy, which the FED can use to justify sticking with the higher interest rates to push inflation levels to the recommended 2% level.

 

With the FED unlikely to cut interest rates in the year’s second half, investment banks and analysts have started adjusting their predictions for gold prices in 2023.

So, what are experts saying?

Source: sbcgold.com

Analysts have cut their gold price forecast for 2023 to $1923 an ounce down from an initial forecast of $2,009.
On the other hand, the team at Goldman Sachs is bullish, forecasting an average gold price of $2078 for the third quarter of 2023. The analysts expect the precious metal to end the year at $2108, translating to an average price of $2021 for the entire year.
  • Saxo Bank: 
On its part, Saxo Bank has a price forecast of $3,000.
  • Standard Chartered: 
Standard Chartered analysts have settled on the $2,250 gold price prediction for 2023.
Even as more people question why the gold price is going down, the World Bank expects gold prices to drop to about $1600 before the end of the year.
  • JP Morgan: 
  • The team at JP Morgan has a price forecast of $1860.
    • RBC Capital: 
    The team at RBC Capital setlines on the $1890 price target.
    Strategists have left their year-end average gold price at $1905 According to analysts, the precious metal is losing momentum to the upside on struggling to hold gains above the $2,000 level.
    With the metal struggling for a direction below the $1950 an ounce level, further losses could be on the way, especially on the dollar strengthening on waning interest rate cut expectations.

    Why is Gold Rising

    Gold has lost about 5% in value from highs of $2046 an ounce recorded in May 2023. The rally early in the year came against the backdrop of investors turning to the precious metal as a safe haven at the height of the banking crisis. The FED is hinting that it will no longer hike interest rates, with inflation levels dropping as one catalyst offering support to a spike in gold prices.

    A deep pullback resulted in gold prices tanking below the $1900 an ounce level. However, it has since bounced back and is showing some signs of strength. The bounce back has come against the backdrop of dollar weakness across the board.

    The greenback pulled back from highs of 103.24 on the non-farm payroll report for June, falling short of expectations and hinting that the labor market might be cooling off in the face of high-interest rates. The US economy added 205,000 jobs in June, against the 229,000 expected, all but triggering the US dollar selloff.

    The result was gold prices edging higher after threatening to plunge and find support below the $1900 level. The dollar index plunging below the 101 handle could be the new catalyst to support a further uptick in gold prices after the recent bounce back near the $1900 an ounce level.

    The deep pullback in gold prices was also triggered by the softening of net purchases by central banks. Last year and into the first quarter of this year, central banks made record purchases of gold. The buying spree came as the banks sought to shield their respective economies from high inflation and volatile bond prices.

    The US and its allies moving to freeze Russian assets also forced central banks’ hands into buying physical gold, therefore, triggering demand in the market.

    The net result was prices rallying to record highs of $2081. Consequently, demand for gold hit an 11-year high of 4,741 tons in 2022, up from 3,678 tons as of 2020, driven by central bank purchases and strong interest from real investors.

    Fast forward to today, and net purchases for gold are expected to soften in 2023 as Turkey resorts to being a net seller. The country’s central bank has been offloading its gold reserves in response to strong demand from the domestic market. Increased supply into the market amid waning demand has weighed significantly on prices, resulting in the plunge from above the $2,000 an-ounce level.

    Gold holdings at the Bank of England, one of the largest storage hubs, have dropped by 12% from the 2021 peak. The offloading into the market might have triggered a glut in supply, consequently fueling a decline in prices.

    Gold Price Forecast for 2024

    Gold prices remain under pressure after struggling to find support above the $2,000 level. The recent pullback has seen prices pull to the 200-day moving average, a pivotal level above which the metal remains bullish.

    On the other hand, gold prices edging lower and closing below the 200-day moving level could be the catalyst to trigger renewed selloff that could see gold prices end 2023 below the $1900 an ounce level. Therefore, the best time to sell gold in 2023 will be when prices close below the 200-day moving average on the daily chart.

    The factors in play currently support further weakness in gold prices that should see prices edge lower, as was when prices rallied to record highs only to drop below the $1800 an ounce level as part of a deep correction.

    Nevertheless, 2024 could be another opportunity for bulls to push gold prices higher and record a new all-time high, especially after a deep pullback from current levels. Gold prices ending 2023 below the $1900 an ounce level could be followed by another strong movement to the upside in 2024.

    One of the factors supporting gold prices to rally above the $2100 level in 2024 is the easing of monetary policy tightening by central banks. The US Federal Reserve going slow on interest rate hikes this year is something that could pave the way for interest cuts in 2024. Interest rate cuts could trigger dollar weakness in 2024, which should support higher gold prices as they are negatively correlated.

    Likewise, the European Central Bank and the Bank of England are also expected to go slow on interest rate hikes in 2024. Any slowdown in monetary tightening should favor non-yielding assets like gold, which should experience a significant price boost. Tighter central bank policies and a decline in economic growth should make gold appealing, which should boost its performance as a risk on investment assets.

    According to Georgette Boele, Senior FX & Precious Metals Strategist at ABN AMRO, monetary policy easing by the FED, ECB, and BoE will be positive for gold prices in 2024. Gold prices are expected to increase as the rate difference between the USD, EUR, and GBP narrows.

    We have to ask that very important question again. What are the experts saying?

    • ABN AMRO:

    The strategists at ABN AMRO expect gold prices to average $2000 and above in 2024.

    • ANZ Research:

    Meanwhile, strategists at ANZ Research expect gold prices to accelerate to $2,200 by September 2024.

    • The World Bank:

    Analysts at The World Bank expect gold prices to finish 2023 at about $1900 and to drop to about $1750 by the end of 2024.

    Future gold price predictions vary widely as analysts and strategists consider various factors likely to change.

    Gold Price Predictions for the Next 5 Years

    Continuous market turbulence makes providing an accurate gold forecast for the next five years difficult. Nevertheless, considering factors influencing prices at current levels, some investment banks have given ambitious estimates.

    The team of strategists at Goldman Sachs expects the current bull market in the commodities sector to continue over the next 10 years. Therefore, gold is expected to continue rerating higher, be it at the back of small pullbacks, as has been the case in recent years.

    In recent years, every deep pullback from record highs has been followed by another strong push to the upside as part of a new bull cycle. If history were to repeat itself, then there is a high possibility of gold prices rallying to record highs of $2200 by 2025.

    The inverse correlation between gold and the US dollar is one factor that should influence gold price prediction in 2030. The precious metal’s long-term outlook is highly dependent on the strength of the US dollar as the global reserve currency.

    With talk that Russia, China, and other nations forming the BRICs group are contemplating coming up with an alternative to the US dollar, demand for gold is expected to skyrocket. The nations have already touted the use of gold to back the new currency. Such a move is expected to trigger a significant spike in gold demand that should increase its price exponentially.

    The prospect of another reserve currency backed by gold could be the catalyst to take the gold price in 2030 to more than $3,000 an ounce. Be that as it may, immediate estimates put gold prices between $2,200 and $3,100 over the next five years.

    Factors Influencing Gold Price Predictions

    Gold is a unique asset that is key to the global economy. Consequently, its price is influenced by various factors that strategists and analysts take into consideration when offering price forecasts.

    Consumption demand is one of the most important factors taken into consideration when ascertaining gold prices in 5 years or when issuing any other forecast. Consumption has to do with how the precious metal is utilized in various sectors. While the metal was mostly used to make jewelry in the past, it’s becoming an important component in modern electronics.

    Strong demand from electronic manufacturers continues to influence prices in the market amid limited supplies. The metal has proven to be highly effective as a good conductor fueling strong use in the industrial sector. Demand from industries is one factor that continues to influence gold price predictions.

    In determining gold prices in 10 years, demand from central banks is another factor often considered. Central banks are constantly purchasing the metal as it is seen as a reliable store of wealth, which can safeguard a nation’s reserves.

    The prospect of central banks purchasing any available gold in the market greatly influences prices and the metal’s long-term outlook.

    Gold as an asset is also commonly used to protect against extreme volatility in the market. Therefore, most people and institutions invest in the asset in times of uncertainty. The risk of the global economy plunging into recession is one factor taken into consideration while trying to ascertain the future value of gold.

    Inflation levels and their outlook are other important factors considered when determining how much gold will be worth in 2040. Global central banks have been hiking interest rates in the race to bring inflation levels lower. As long as the central banks hike interest rates to try and reduce inflationary pressures in the global economy, gold prices would be hurt as investors shun the precious metal in favor of yielding assets like government bonds and treasuries.

    Final Gold Outlook: Is Gold a Good Investment?

    Over the years, gold has proven to be a good investment, especially when the world is facing uncertainties and in times of geopolitical tensions. Since 2020, at the start of the COVID-19 pandemic, the price of gold has appreciated by more than 30%. The appreciation comes from investors turning to the yellow metal as a store of wealth amid global uncertainties.

    Likewise, the precious metal presents a solid, valuable proposition amid the inflationary pressures and the prospect of the global economy plunging into recession. With prices having found support above the $1900 an ounce level, there is always an opportunity to generate some value on further appreciation.

    Gold looks like a smart investment going by the positive gold price prediction of 2030. With most analysts and strategists expecting prices to average more than $2200 an ounce, there is significant value to unlock from current levels.

    Gold will always be a smart investment as it is an effective hedge against inflation. That’s because it always holds its value and preserves purchasing power over the long haul. As inflation remains high, the value of gold tends to increase as more hedge funds and institutional investors go for the precious metal.

    Additionally, gold is always a good investment for anyone looking to diversify their investment portfolio. Given its negative correlation with the stock market, it is a good asset for insulating a portfolio from losses in traditional assets like stocks. In addition, it tends to perform well in times of economic turmoil when the stock markets are under pressure.

    Why Gold Mining is A Good Investment?

    Responsible and sustainable gold mining has always been a good investment for the companies doing the work and the community. According to the World Gold Council, when carried out in the right way, gold mining supports sustained socio-economic development in countries and communities that hold the mineral.

    Over the years, gold mining has always been a major economic driver for many countries worldwide. When managed in a transparent and accountable way, it always leads to the creation of employment and business opportunities for people. The direct and indirect job opportunities help bolster local communities and the economy in addition to foreign direct investments and tax revenues to the countries.

    Pan African Resources is one of the companies that can attest to gold mining being a smart investment. The mid-tier exploration and mining company’s assets are gold mines in Africa that are sustainable, safe, high-margin margin, and long-life gold producers. The company relies on state-of-the-art technologies that are more energy efficient and ensure greater air and water quality management to ensure more effective tailings reprocessing therefore reducing environmental pollution. The company is focused on extracting gold safely and in a sustainable manner that generates compelling returns while ensuring the long-term sustainability of operations.

    Thanks to its underexplored resources, Africa is one of the leaders of gold mining around the world. With less than 1,000 gold mining projects, the continent offers tremendous opportunities for gold mining companies. This might explain the considerable movement across various countries in pursuit of highly prospective gold mines.

    While Africa has been famous for gold production since 1886, many underexplored projects with high-grade gold deposits exist. While the focus has always been on South Africa, which has historically produced the most gold, there are other countries with significant deposits.

    West Africa is emerging as a frontier of gold mining, with Ghana, Mali, and Burkina Faso attracting significant interest on the exploration and mining front. The majority of the 30 West African mines developed over the past 20 years have only targeted shallow, easily mineable oxide material.

    Deeper sulphide ore is highly prospective for companies with advanced technology and financial muscle. Currently, three of the largest gold mines in Africa are in West Africa. Significant gold deposits also exist in the Democratic Republic of Congo and Tanzania. New discoveries are being made in the Arabian-Nubian Shield, which stretches from Saudi Arabia to Sudan in the east of Africa, with the potential for large shallow gold deposits as currently being mined in Egypt. Pan African has secured highly prospective exploration licences near Port Sudan in the Republic of the Sudan, and initial results are very encouraging..

    As the prices of gold continue to rise, gold exploration on the continent is expected to increase with increased mergers and acquisitions activities. Smaller and more agile resource companies are also in the race against time to tap the continent’s vast gold resource.

    Pan African Resources is one of the mid-tier resources spearheading gold mining in Africa, with a production capacity of over 200,000 oz a year and expected to reach 250,000 oz/year once its new Mintails retreatment operations reach full production in 2025. The company owns a vast portfolio of high-quality, low-cost operations in South Africa and exploration projects in the Sudan. It stands out in balancing its financial business goals against human goals.

    Consequently, Pan African Resources sustainably engages in gold mining focused on supporting the local communities and the environment at large. The company views sustainability as part of its core business priority and believes that it is a critical factor in operating a successful business. Therefore, the company is focused on producing high-margin ounces of gold in a safe and efficient way while minimising environmental impact as part of its ESG strategy.

    Frequently Asked Questions

    What will gold be worth in 5 years?

    Gold prices have registered a record high of $2081 an ounce in 2023. Having gained more than 30% over the past three years, the precious metal remains bullish and likely to continue appreciating. Likewise, the metal will reach record highs of $2200 by 2025. Market turbulence, economic uncertainty, and geopolitical tensions could see the price increase to about $3,000 an ounce in the next five years.

    Is gold a good investment?

    Yes, gold is always a good investment for anyone looking to profit from price appreciation. The metal tends to appreciate due to a number of factors not limited to rising inflation, market turbulence, and geopolitical uncertainties. Therefore, it is always a good investment as a store of wealth and for investment portfolio diversification. It also acts as a solid hedge against rising inflation. Over the long term, an investment in gold has outperformed stock exchange indices, bonds, and various other asset classes.

    What is the gold price forecast for 2023?

    Gold prices are expected to average more than $1900 an ounce in 2023. The easing of monetary policy tightening in the US and the weakening of the US dollar are some of the factors supporting higher gold prices in 2023. Experts find the outlook promising due to easing monetary policy tightening

    Will gold go up or down?

    Like any commodity traded in the global markets, gold prices will always fluctuate up and down due to the forces of supply and demand. However, the precious metal remains in an uptrend with deep pullbacks or sell off, offering opportunities for people to buy the metal and trigger significant price gains.

    How High Will Gold Go in 2024?

    While it has pulled back from its peak, the gold price remains close to its highest levels in history in 2023. If you’re trying to see what the future holds for it, you might be asking how high gold prices will go in 2024.

    Gold prices are affected by geopolitical events, interest rates, the dollar’s strength, and various other factors. With geopolitical tensions in Europe and the Middle East and a high-stakes US presidential election, 2024 is shaping up to be an eventful year that could have a significant impact on the gold price.

    Aside from geopolitical events, global central banks may also attempt to cut interest rates to avoid recession. And that would benefit gold by boosting its demand as a safe haven asset in times of economic distress.

    Additionally, growing industrial demand will also continue to move gold prices. In light of all this, the gold price has the potential to go above $2,100 in 2024. It’s even possible for gold to go as high as $2,200 in 2024 if there is a good mix of factors favorable to the demand for the precious metal.

    What Will Gold Be Worth in 2040?

    Gold prices usually change slowly, which is why many consider it to be an excellent store of value. While gold generally maintains a stable price in most economic and political climates, it appreciates in the long run.

    If you’re considering investing in gold over the long term, you might ask what gold might be worth in 2040.

    Investment demand has been the major force driving gold prices. Even so, gold only accounts for 1% of the global value of investment assets. In other words, bonds, stocks, and others are still more popular investment products than gold. But that could change in the future as investors look to diversify their portfolios with less correlated investment products.

    If you look at gold demand trends, you’ll notice that China and India are the top gold markets by demand. What is common between China and India is that they have huge populations and growing awareness of diverse investment products.

    Moreover, these countries have large and growing industrial activities. Apart from investments, industrial demand is shaping up to be a major force impacting gold prices. Therefore, the demand for gold is poised to continue growing.

    If you look back 15 years, the gold price has appreciated about 130%. Assuming the precious metal maintains that pace of value growth, gold is predicted to be worth more than $4,500 by 2040.

    October 27th, 2023Investing

    About the Author: Neha Gupta

    Neha Gupta has worked in the financial industry for over 17 years. Gupta earned her diploma in business administration degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) designation. She has successfully completed Level II of her CFA.