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

Is it possible for gold to breach the $2,000 per ounce mark once more in 2023 or 2024? Could gold surpass the $2,000 per ounce threshold again in 2023 or 2024? This pressing question arises as gold has repeatedly struggled to exceed this crucial psychological barrier, failing on three separate occasions. Thus, it’s not surprising that predictions for gold’s price trajectory in 2023 are mixed, particularly after the metal reached a new high early in the year, followed by a pronounced decline.

Each effort to hit the $2050 level has resulted in a sharp downturn, marked by significant sell-offs. With a new high already achieved in the early months of 2023, there is ongoing debate about whether gold prices will fall further or begin to climb.

Such questions are paramount for investors, as gold is currently in a precarious position, with the possibility of falling below the $1900 per ounce level, largely influenced by the US dollar’s strength. Consequently, the outlook for gold prices in 2023 is widely varied, with analysts holding diverse views on the multitude of factors at play.

The uncertainty surrounding central bank monetary policies, recession risks, fluctuations in international reserve holdings, and the US dollar’s strength significantly affect the long-term perspective and sentiment regarding gold prices. Moreover, the speculation about the introduction of a new global currency to rival the US dollar’s supremacy is another crucial element influencing future gold price projections.

Gold Price Action: Strong Resistance at $2080 Area

During the height of the pandemic in 2020, gold saw a significant increase in demand as investors turned to the metal for its reputation as a safe haven and a means to safeguard wealth. This surge propelled gold prices past the crucial $2000 mark for the first time. However, after reaching a peak of $2075, a steep drop ensued, with prices dipping to approximately $1676.

A revival in gold prices was observed, with the metal climbing to $2049 by March 2022. Yet, upon encountering resistance at this pivotal point, the prices fell back to $1630 by November. This retreat was followed by a vigorous recovery, with gold prices hitting $2046 in April 2023, marking the year’s highest level, spurred by the preceding year’s market dynamics. The market is currently adjusting to shifting interest rate forecasts and the sustained robustness of the US economy, which might provide the Federal Reserve with the justification for additional rate hikes, potentially adversely affecting gold prices.

The early 2023 rally to $2046 was largely attributed to the banking crisis in the US, notably marked by JP Morgan’s takeover of First Republic’s assets. This event intensified risk aversion, leading investors to seek refuge in safe havens such as gold and shun riskier assets like equities.

Looking ahead, the initial upward drive of gold has waned, and the metal has shifted into a downtrend. It has been trading within a narrow range of $1900 to $1950 for the majority of the year and seems set to drop below the $1900 threshold as the year ends.

This downturn in gold prices poses an important question: why is the value of gold declining? Even after achieving another record high, gold prices have weakened and are now confined to a tight range between $1900 and $1950, indicating a significant sell-off each time prices near the $2000 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

Judging by historical patterns, the forecast for gold seems to lean towards a bearish trend. 

  • Prices have begun to decline, echoing similar trends observed in past years when attempts to breach the $2,100 mark were unsuccessful. 
  • Additionally, gold prices have faced a notable decrease amid rising interest rates.

Strong US economic indicators, including a robust job market, increasing retail sales, and a flourishing manufacturing sector, have decreased the likelihood of the US Federal Reserve (Fed) lowering interest rates. 

Traditionally, gold prices have inversely correlated with interest rates, with higher rates often leading to a stronger dollar and, consequently, a decrease in gold prices. In such environments, investors tend to pivot towards bonds, drawn by the allure of higher yields, often at the expense of gold.

Despite the Fed’s pause on hiking interest rates due to concerns over potentially triggering a recession, the chance of rate reductions seems to be fading with each passing day. Currently, the US is poised to maintain a high-interest rate environment into the next year, bolstered by economic data that supports the health of the US economy, giving the Fed reason to maintain higher rates to achieve a 2% inflation target.

With the Fed unlikely to reduce interest rates in the second half of the year, investment banks and analysts are revising their gold price forecasts for 2023. 

Here’s what some experts are predicting:

Source: sbcgold.com

Analysts have revised their 2023 gold price forecast to $1,923 per ounce, down from an initial $2,009.

Conversely, Goldman Sachs is optimistic, projecting an average gold price of $2,078 for Q3 2023, with an end-of-year prediction of $2,108, averaging $2,021 for the year.

  • Saxo Bank: 

Predicts a gold price of $3,000.

  • Standard Chartered: 

Forecasts a gold price of $2,250 for 2023.

Anticipates a decrease in gold prices to around $1,600 by year-end.

  • JP Morgan: 

Projects a gold price of $1,860.

  • RBC Capital: 

The team at RBC Capital sets a target of $1,890.

Maintains a year-end average gold price forecast of $1,905, noting the metal’s struggle to sustain gains above the $2,000 mark.

The downward trend in gold prices poses the question: why is gold’s value decreasing? Despite achieving a new high, gold prices have dipped and now fluctuate within a tight range of $1,900 to $1,950, indicating significant sell-offs whenever prices near the $2,000 level.

Why is Gold Rising

Gold has shed approximately 5% in value from its May 2023 high of $2,046 per ounce. The initial rally was driven by investors seeking gold as a safe haven during the peak of the banking crisis. With the Fed indicating a halt to interest rate hikes and a drop in inflation levels, there’s renewed support for an increase in gold prices.

Following a sharp decline, gold prices fell below the $1,900 mark but have since shown resilience. The recovery is partly due to a weakening dollar.

The dollar experienced a retreat from its high of 103.24 following the June non-farm payroll report, which fell short of expectations, suggesting a possible slowdown in the job market due to high-interest rates. The US economy added 205,000 jobs in June, below the expected 229,000, leading to a sell-off of the US dollar.

This resulted in gold prices inching higher after nearly falling below the $1,900 level. A drop in the dollar index below 101 could further support an increase in gold prices following its recent recovery.

The initial drop in gold prices was also influenced by a reduction in net purchases by central banks. Following a spree of record gold purchases last year and into the first quarter of this year, aimed at protecting economies from high inflation and unstable bond prices, demand surged.

The international move to freeze Russian assets also compelled central banks to increase their physical gold holdings, boosting market demand. This led to a peak in gold prices at $2,081, with demand reaching an 11-year high of 4,741 tons in 2022, up from 3,678 tons in 2020, spurred by central bank acquisitions and strong investor interest.

Looking ahead, net gold purchases are expected to decline in 2023 as Turkey becomes a net seller, responding to high domestic demand. This increase in supply amid declining demand has significantly impacted prices, leading to a drop from above the $2,000 mark.

Gold reserves at the Bank of England, a major storage centre, have decreased by 12% from their peak in 2021. This release into the market could have led to an oversupply, thereby contributing to a reduction in prices.

Gold Price Forecast for 2024

Gold remains under pressure, finding it challenging to sustain levels above the $2,000 mark. The recent decline has seen gold approach the 200-day moving average, an indicator often associated with bullish trends when prices remain above this level.

Should gold drop below this average, it could trigger a substantial sell-off, possibly resulting in gold ending 2023 below the $1,900 per ounce mark. Therefore, a pivotal time to consider offloading gold in 2023 might be when it dips below the 200-day moving average on the daily chart.

The current trend indicates a continuation of bearish momentum for gold, with the possibility of further declines mirroring the pattern seen when prices soared to historic highs before facing a significant correction below the $1,800 mark.

Nonetheless, 2024 could mark a potential turnaround, with bullish forces potentially propelling gold to unprecedented highs, especially following a considerable retreat from present levels. Ending 2023 below the $1,900 mark could pave the way for a substantial rise in 2024.

A significant factor that could drive gold prices above the $2,100 threshold in 2024 is the expected easing of monetary policies by central banks. The US Federal Reserve’s cautious stance on interest rate hikes this year might lead to reductions in 2024, which could weaken the dollar and, due to their inverse correlation, support higher gold prices.

The European Central Bank and the Bank of England are also anticipated to slow their rate hike pace in 2024. This slowdown in monetary tightening could favour non-yielding assets like gold, potentially resulting in a notable increase in prices. Tighter central bank policies coupled with a slowdown in economic growth could enhance gold’s appeal, boosting its performance as an investment asset in risk-on scenarios.

According to Georgette Boele, Senior FX & Precious Metals Strategist at ABN AMRO, the softening of monetary policies by the Fed, ECB, and BoE is likely to have a positive impact on gold prices in 2024. With the differentials in interest rates between the USD, EUR, and GBP narrowing, an increase in gold prices is expected.

Turning to expert forecasts:

  • ABN AMRO:

Analysts expect gold prices to average above $2,000 in 2024.

  • ANZ Research:

Predicts a rise in gold prices to $2,200 by September 2024.

  • The World Bank:

Foresees gold ending 2023 around $1,900, with a potential drop to about $1,750 by the end of 2024.

Projections for future gold prices vary widely, with analysts considering an array of evolving factors.

Gold Price Predictions for the Next 5 Years

The constant market volatility makes accurately predicting gold prices for the next five years challenging. Nevertheless, given the factors currently influencing gold prices, some investment banks have issued optimistic forecasts.

Goldman Sachs’ strategists foresee the commodities sector’s bull market extending over the next decade, suggesting gold’s value will continue to climb, albeit with possible minor setbacks, echoing trends seen in recent years.

Traditionally, significant dips from peak prices have been followed by robust recoveries, ushering in new bull market cycles for gold. If this pattern persists, gold could reach heights of $2,200 by 2025.

The dynamic between gold and the US dollar is pivotal for gold’s price outlook towards 2030. The future of gold is closely tied to the US dollar’s role as the global reserve currency.

With BRICs nations (Brazil, Russia, India, China, and South Africa) considering the introduction of a US dollar alternative and potentially backing this new currency with gold, demand for gold could see a significant surge. This move could lead to a marked increase in gold demand, substantially elevating its price.

The introduction of a gold-backed reserve currency could see gold prices surpassing $3,000 an ounce by 2030. Current estimates place gold prices between $2,200 and $3,100 over the next five years.

Factors Influencing Gold Price Predictions

The value of gold, a cornerstone asset in the worldwide economy, is shaped by various factors, which are essential for analysts and strategists to consider in their forecasts.

A key influencer is the demand for gold across diverse sectors. Beyond its traditional use in jewellery, gold’s role in modern electronics has grown due to its superior conductivity, making it indispensable in the industrial domain. The strong demand from the electronics sector, juxtaposed with limited availability, significantly influences gold price projections.

The buying patterns of central banks also play a pivotal role. As trusted reserves of wealth, central banks globally accumulate gold to safeguard national reserves, thereby influencing gold prices and shaping long-term perspectives.

Gold’s reputation as a refuge during times of market turbulence enhances its desirability during economic uncertainties, further impacting its future valuation.

Furthermore, the trajectory of inflation rates is a critical aspect in evaluating gold’s future worth. As central banks around the world increase interest rates to curb inflation, the allure of gold may wane as investors pivot towards yield-generating assets like treasuries and government bonds.

Final Gold Outlook: Is Gold a Good Investment?

Historically, gold has stood as a steadfast investment, especially in times of global uncertainty and geopolitical tensions. With a more than 30% increase in value since the beginning of the COVID-19 pandemic in 2020, gold has affirmed its status as a reliable reserve of wealth amidst global upheavals.

Additionally, gold presents a compelling investment proposition amidst inflationary challenges and the looming threat of a worldwide economic slump. Currently supported above the $1900 per ounce level, gold harbours potential for further appreciation.

Looking ahead, gold remains an appealing asset, with forecasts indicating an average price surpassing $2200 per ounce by 2030. As an inflation hedge, gold consistently retains its value, ensuring sustained purchasing power over time. With persistent high inflation, gold becomes increasingly attractive to hedge funds and institutional investors.

Moreover, gold’s negative correlation with the stock market makes it an invaluable tool for portfolio diversification, offering protection against economic downturns and stock market fluctuations.

Why Gold Mining is A Good Investment?

Ethical and eco-friendly gold mining not only benefits the companies involved but also significantly contributes to the welfare of surrounding communities. The World Gold Council emphasises that responsible gold mining can lead to sustained socio-economic growth in areas endowed with this valuable resource.

Globally, gold mining plays a pivotal role in economic development, creating both direct and indirect job opportunities, bolstering local communities, and increasing a nation’s foreign investment and tax revenues, provided it’s managed transparently and responsibly.

Pan African Resources serves as a prime example of the advantages of judicious gold mining. Recognised as a mid-tier mining company, its operations in Africa are noted for their sustainability, safety, and high profitability. The company utilises advanced, energy-efficient technology to improve air and water quality and enhance the efficiency of tailings reprocessing, thereby reducing its environmental footprint. Their dedication to sustainable and safe gold extraction is foundational to their ongoing success and the sustainability of their operations.

With Africa’s gold resources still largely untapped, the continent stands as a key player in the global gold mining sector. Despite having less than a thousand gold mining projects, Africa presents vast opportunities for mining companies. While South Africa has traditionally led in gold production, West Africa is emerging as a new hub, with nations like Ghana, Mali, and Burkina Faso drawing significant interest for mining and exploration.

The advent of advanced technology and substantial financial backing is unlocking the potential for mining deeper sulphide ores, with noteworthy deposits also in the Democratic Republic of Congo, Tanzania, and the geologically promising Arabian-Nubian Shield. Pan African Resources is actively pursuing exploration in these fertile areas, including near Port Sudan in Sudan, where preliminary results are encouraging.

As gold prices continue to climb, investment and exploration in Africa’s gold sector are expected to intensify, leading to an increase in mergers, acquisitions, and exploration projects. Pan African Resources is leading the charge, aiming to significantly boost its production capacity while maintaining its commitment to environmental and social responsibility. The company’s focus on sustainability is integral to its business ethos, striving for safe, efficient gold production with minimal environmental impact as part of its comprehensive ESG strategy.

West Africa is gaining prominence as a gold mining hotspot, with Ghana, Mali, and Burkina Faso attracting significant exploration and mining interest. The last two decades have seen the development of around 30 gold mines in the region, primarily targeting more accessible and cost-effective oxide ores.

Yet, the untapped potential of deep sulphide ores is drawing interest from companies equipped with the latest technology and robust financial resources. Currently, West Africa hosts some of the largest gold mines on the continent, with significant gold reserves also located in the Democratic Republic of Congo and Tanzania. New discoveries in the Arabian-Nubian Shield, stretching from Saudi Arabia to Sudan in Eastern Africa, suggest the presence of extensive, readily accessible gold deposits, akin to those being mined in Egypt. Pan African Resources has secured promising exploration licences in these regions, particularly near Port Sudan in Sudan, where initial findings are promising.

With an upward trend in gold prices, an increase in exploration and investment activities across the continent is anticipated, leading to more mergers, acquisitions, and exploration initiatives. Pan African Resources is at the forefront of this movement, operating as a mid-tier company with a production capacity of over 200,000 ounces per year, expected to rise to 250,000 ounces per year with the full operation of its new Mintails retreatment facilities by 2025. The company boasts a portfolio of high-quality, cost-effective operations in South Africa and exploration projects in Sudan, distinguishing itself by aligning financial goals with social objectives.

Consequently, Pan African Resources is dedicated to conducting gold mining responsibly, focusing on supporting local communities and safeguarding the environment. Sustainability is woven into the fabric of its business strategy, deemed crucial for achieving long-term success. The company is committed to producing high-margin gold in a safe and efficient manner, minimising its environmental impact in line with its ESG (Environmental, Social, and Governance) principles.

Frequently Asked Questions

What will gold be worth in 5 years?

By 2023, gold attained a record high of $2081 per ounce, reflecting an upward trajectory with over a 30% rise in the past three years. Forecasts indicate gold might reach $2200 per ounce by 2025. Market fluctuations, economic uncertainties, and international geopolitical tensions could potentially elevate gold prices to approximately $3,000 per ounce in the next half-decade.

Is gold a good investment?

Indeed, gold is a wise choice for investors aiming to capitalise on its appreciating value. Its appreciation is driven by several factors, such as inflation, market instability, and geopolitical unrest. Gold acts as a stable store of value and an effective portfolio diversifier, consistently offering inflation protection. Traditionally, gold investments have outperformed stocks, bonds, and numerous other asset categories over extended periods.

What is the gold price forecast for 2023?

The expectation for gold in 2023 is for prices to average over $1900 per ounce. This positive forecast is supported by the easing of monetary policy in the US and the diminishing strength of the US dollar, contributing to favourable gold price predictions.

Will gold go up or down?

The prices of gold, like all commodities traded on the global market, are prone to variations driven by supply and demand factors. Despite these variances, gold generally exhibits an upward trend. Times of notable declines or sell-offs provide opportunities for investment, potentially leading to significant gains in value.