Gold Price Predictions: A Forecast for 2024, 2025, and Beyond
Is it possible for gold to breach the $3,000 per ounce mark in 2024 or 2025? This is the burning question as gold has been in fine form over the past 12 months, rallying to a new record high of $2450 an ounce in May 2024. The rally has come on the precious metal receiving a boost on growing expectations that the US Federal Reserve and the European Central Bank are on course to cut interest rates that remain at 23-year highs.
Additionally, gold has benefited from simmering geopolitical tensions in Europe and, at this time, in the Middle East. The tussle between Israel and Palestine has continued to fuel concerns of a total blown war in the Middle East, fuelling tensions in the markets and making Gold an attractive investment prospect given its ability to store value in times of uncertainty.
The spike in gold prices to record highs of $2450 an ounce came on concerns of a heightened war between Israel and Iran following the later invasion with a series of missiles and drones. While geopolitical tensions have eased, gold remains upbeat in the market, having found support above $2300 an ounce.
Amid the upward momentum, there are still critical queries among investors as gold finds itself in a delicate state after a recent pullback from all-time highs. Gold has struggled to stabilize above the $2400 an ounce level, pulling to lows of $2321 an ounce. A strengthening US dollar with the Federal Reserve (Fed) fending off a push to cut interest rates raises the prospect of gold price dropping below the $2300 an ounce mark.
As it stands, forecasts for gold prices in 2024 and the gold price in 2025 are extremely diverse, with experts expressing differing opinions on the influencing factors.
The uncertainties surrounding Central Bank monetary policies, the threat of recessions, changes in foreign reserve holdings, and the dominance of the US dollar are all significant factors that impact the future outlook and sentiment toward gold prices. Discussions about a new global currency to challenge the dominance of the US dollar also play a significant role in shaping future gold price predictions.
Table of Contents
- Gold Price Action: Strong Resistance at $2400 Area
- Gold Price Forecast for the Rest of 2024
- Why is Gold Rising
- Gold Price Forecast for 2024
- Gold Price Predictions for the Next 5 Years
- Factors Influencing Gold Price Predictions
- Final Gold Outlook: Why Gold Mining is A Good Investment
- Why Gold Mining is A Good Investment?
- Frequently Asked Questions
- What will gold be worth in 5 years?
- Is gold a good investment?
- What is the gold price forecast for 2023?
- Will gold go up or down?
Gold Price Action: Strong Resistance at $2400 Area
In 2020, amid the pandemic’s peak, there was a notable surge in gold demand as investors flocked to the metal for its safe-haven qualities and as a means to preserve wealth. This made gold prices break the pivotal $2000 threshold for the first time. After peaking at $2075, gold experienced a sharp decline, falling to around $1676.
Subsequently, there was a resurgence as gold prices climbed to $2049 in March 2022. However, after facing resistance at these crucial levels, gold prices retreated to $1630 by November. This downturn was followed by another robust upward movement, with the price reaching $2046 in April 2023.
The surge to $2046 in early 2023 was primarily driven by the banking turmoil in the US, highlighted by JP Morgan’s acquisition of First Republic’s assets. This crisis heightened risk aversion and prompted investors to opt for safe havens like gold while avoiding more volatile investments such as stocks.
With central banks hinting at further interest rate hikes to tame runaway inflation, gold was again under pressure amid a strengthening US dollar. The result was the precious metal plunging from the record highs of the time to lows of about $1810 in October of 2023.
This deep pullback presented another exciting entry point for gold buyers who missed the initial leg of record highs. As 2023 came to a close, it became clear that central banks had reached their peak in monetary policy tightening as most started pushing back on further hikes.
In the end, gold registered one of the biggest comebacks with notable highs after each pullback. As 2023 came to a close, gold was skimming its record highs, trading at around $2070. It has continued to edge higher for the better part of 2024, having received a boost from soaring geopolitical tensions and heightened expectations of interest rate cuts as central banks seek to avert a recession.
As the year progresses, gold’s upward momentum has diminished, and the metal has entered a bearish phase after experiencing strong resistance near the $2450 level. Gold has been trading within a narrow band of $2300 to $2400 for much of the year and remains susceptible to falling below the $2300 mark.
The decline in gold prices raises a significant query: why is gold’s value diminishing? Despite reaching another all-time high, gold prices have faltered and linger in a constrained range of $2300 to $2400, underscoring a pronounced sell-off if prices approach the $2300 mark.
Gold Price Forecast for the Rest of 2024
The gold price has ranged from $2030 to $2450 in 2024. A variety of factors impact gold prices. These factors include 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 drives up the metal’s price. While disruptions in mining operations can limit gold supply, strong demand for the precious metal is a significant 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 increased prices. Analysts are keenly observing gold prices 2024 per gram and gold price predictions for the next five years to gauge future trends.
As for interest rates, gold competes with bonds, stocks, and high-yield cash savings accounts as investments. Bonds, high-yield savings accounts, and other investments become more appealing when interest rates go up more than gold. That causes gold prices to dip as investors pull out their funds to pursue yield-bearing investments.
A stronger U.S. dollar also 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 are another factor that tends to drive more investors to gold, which causes the metal’s price to jump. The elevated gold prices in 2023 and the 2024 gold price 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 take time 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.
This gold price prediction chart shows the gold price trend over the past five years alongside its 20-day, 50-day, 100-day, and 200-day exponential moving averages (EMA).
Looking at the graph, you will see that there are times when the spot gold price is above its moving average, and at other times, it is below the moving average.
When the gold price climbs above its 20-day EMA, it becomes its support level, and the price can surge. 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. The gold price, however, rarely breaks below its 200-day EMA.
Source: Tradingview.com
Therefore, you ascertain a hint about where 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.
Historically, demand for a store of value has driven gold prices. With gold considered an excellent conductor in electronic components, industrial demand could significantly impact the gold price in the future.
That said, let’s see how gold prices have evolved over the years with a focus on the significant price milestones.
- 1969 – 1972: The gold price was $35 at the close of 1969. By the end of 1972, it had hit $65. In those 4 years, 1972 was the best for the yellow metal as its price soared by 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 in at $524, a price milestone for the metal. Gold continued to see strong demand, driving its price to nearly $590 at the end of 1980.
- 1981 – 2004: This was a period of consolidation for the gold price. After reaching nearly $600 in 1980, the gold price dipped to $400 in 1981. It attempted to break above $400 in some years but struggled to keep this momentum. In 2001, the gold price was as low as $250.
- 2005 – 2008: After previous years of consolidation, this was a breakout period for the price of gold. The yellow metal’s price jumped above $510 in 2005 and rose, reaching $865 in 2008.
- 2009 – 2019: This was another milestone period for the gold price. The price of precious metals closed consistently above $1,000 in these ten years.
- 2020 – 2023: The gold price hit a milestone above $2,000 in 2020. Many investors turned to it 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 caused many investors to be cautious about gold.
- 2024: The gold price hit a new milestone in April, rallying to a new record high of $2450. The rally came at the back of soaring geopolitical tensions in the Middle East, triggering strong demand as a store of value. Additionally, gold received a boost on growing expectations as the Fed will start cutting interest rates on inflation and dropping below the 4% level.
Gold Price Forecast for the Rest of 2024
Drawing from past trends, the outlook for gold is becoming more bearish.
- The price decline has already commenced, mirroring patterns seen in past years when attempts to surpass the $2,100 mark were unsuccessful.
- Moreover, gold prices have seen a notable decrease amidst rising interest rates.
Strong economic indicators in the US, such as a robust job market, increasing retail sales, and a thriving manufacturing sector, have diminished the likelihood of the Federal Reserve reducing interest rates. Historically, gold has shown an inverse relationship with interest rates: as interest rates climb, the dollar strengthens, leading to a downturn in gold prices. In a high-interest-rate environment, traders often gravitate towards bonds for higher yields, moving away from gold.
Late last year, the Fed halted rate hikes due to concerns over potential recession risks. While inflationary pressure has struggled to drop below the 2% threshold, the central bank has refrained from hiking further, focusing on potential rate cuts. While current economic data supports the strength of the US economy, allowing the Fed to maintain higher interest rates to achieve a 2% inflation target, the Fed is unlikely to hike further.
Source: Tradingview.com
As expectations are high that the Fed will cut interest rates in the second half of the year to provide some impetus to an economy susceptible to shocks amid the high-interest rate environment, analysts and investment banks have updated their gold price prediction 2024.
Here’s what some experts are saying:
Source: sbcgold.com
Analysts at Bank of America expect gold prices to record a new all-time high of $3,000 and average $2,500 an ounce by the fourth quarter, in strong demand from central banks and Chinese retail traders.
Goldman Sachs is optimistic about gold rising to $2,700 an ounce in 2024 due to high demand as a safe haven amid soaring geopolitical tensions.
- Saxo Bank:
Saxo Bank sees price gains above the $2,300 level on strong buying momentum from hedge funds’ central banks and renewed interest from ETF investors.
Projects a decrease in gold prices to around $1,950 by year-end.
- JP Morgan:
The team at JP Morgan expects gold to be priced at $2,500 as interest rates start to fall
- RBC Capital:
Analysts expect gold prices to average between $2,007 and $2082 in the second half of 2024.
Gold remains well positioned to find its footing above the $2200 an ounce level in 2024 amid growing expectations that central banks led by the Fed will start cutting interest rates in the year’s second half. These predictions are critical for making informed decisions about whether the gold rate will decrease in the coming days or experience a rebound.
Why is Gold Rising
Gold appreciated by about 1.7% in May 2024 as it found support above $2300 an ounce. Early in the year, gold’s value was bolstered by its status as a safe haven amid the escalations of tensions in the Middle East, pitying Israel and Palestine, with Iran also being drawn into the mix. Indications from the Fed that it might start cutting interest rates in the second half of 2024 also fuelled demand for precious metals, helping trigger an uptick in gold prices. However, gold prices dipped below the $2,400 mark in the month as the dollar remained resilient, with the Fed sticking with the high interest.
The dollar experienced a pullback from its peak of 106.24 following concerns about the health of the US economy amid the high interest rate environment. The index dropping to lows of about 104.11 against the basket of other major currencies comes on growing prospects that the Fed will start cutting interest rates to avert a recession. The dollar weakness against other major currencies has been one of the main factors behind gold finding support above the $2,300 an ounce level.
Source: Tradingview.com
A decline in the dollar index below 104 could further fuel an uptick in gold prices following its recent recovery above $2300.
The significant downturn in gold prices in recent days from record highs of $2450 could be attributed to a decrease in net acquisitions by central banks. Additionally, the waning of tensions in the Middle East has also affected its appeal as a safe haven.
Moving forward, gold prices could receive a boost and bounce back to all-time highs on the Fed coming through on interest rate cuts.
Gold Price Forecast for 2024
Gold continues to face downward pressure in the medium term but remains optimistic as part of the long-term uptrend above the $2,300 threshold, a level that has historically been a strong support for gold prices. The recent downturn has brought gold prices to the vicinity of the lower end of its trading range of between $2280 and $2432, a critical juncture. A bounce back from the $2280 area signifies a hopeful stance when prices stay above it.
Conversely, a decline below the $2280 area could lead to a significant sell-off, potentially driving gold prices to the $2070 area where they started in 2024. Thus, a critical moment to consider selling gold in 2024 would be if prices fall below the $2280 area on the daily chart. Likewise, buyers holding firm above the $2280 area on a pullback would fuel suggestions of further upside action, probably to all-time highs of $2450.
Current dynamics suggest continuing the short-term declining trend in gold prices to the lower end of the $2280 and $2450 trading range. The yellow metal should continue trading in the trading range until it becomes clear what the Fed wants to do with interest rates. The Fed’s decision to raise or lower interest rates can significantly impact the strength of the US dollar, affecting the price of gold.
However, 2024 presents a potential turning point where gold might be driven to new record highs, particularly after holding above the $2300 handle.
Experts have varying predictions for gold prices by the end of 2024:
- Gold will approach $2,600 per ounce.
- Gold will exceed $2,700 per ounce.
- Gold will stabilize at around $2,300 per ounce.
- Gold will drop below $1,950 per ounce.
These diverse forecasts reflect the uncertainties in global economic conditions, central bank policies, and geopolitical factors influencing gold’s market dynamics.
Source: gold eagle.com
Central banks’ anticipated relaxation of monetary policy is likely to fuel a rally in gold prices beyond the $2500 mark in 2024. A more cautious approach by the US Federal Reserve towards interest rate hikes this year could lead to rate cuts in 2024, potentially weakening the dollar and supporting higher gold prices due to their inverse relationship.
Similarly, the European Central Bank and the Bank of England are expected to embark on interest rate cuts in 2024. A deceleration in monetary tightening will likely benefit non-yielding assets like gold, potentially leading to a significant price uptick. The combination of stringent central bank policies and reduced economic growth is expected to enhance gold’s attractiveness, improving its performance as an investment asset during times of risk.
Georgette Boole, a Senior FX & Precious Metals Strategist at ABN AMRO, suggests that easing monetary policies by the Fed, ECB, and BoE will positively impact gold prices in 2024 as the interest rate differentials between the USD, EUR, and GBP narrow, gold prices are anticipated to rise.
Once again, we turn to industry experts for their forecasts:
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ABN AMRO:
Analysts at ABN AMRO predict that gold prices will average over $2000 in 2024.
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ANZ Research:
Strategists at ANZ Research anticipate gold prices to climb to $2,200 by September 2024.
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The World Bank:
It predicts gold will close in 2023 at around $1900, with a decline to approximately $1750 by the end of 2024.
Predictions for future gold prices vary as experts weigh various evolving factors.
Gold Price Predictions for the Next 5 Years
The unpredictability of ongoing market fluctuations makes it challenging to project gold prices accurately over the next five years. However, considering the current factors affecting gold prices, some investment banks have provided optimistic projections.
Goldman Sachs’ strategists believe the commodities sector’s bull market will persist for the next decade, suggesting a continued upward revaluation for gold, even considering occasional minor setbacks which have been similar to patterns observed in recent years.
Historically, every significant downturn from peak prices has led to a robust recovery, initiating a new bull market cycle for gold. If this trend continues, the 2025 gold price prediction is set to reach new heights of $3000.
The relationship between gold and the US dollar plays a crucial role in gold’s price forecast for 2030. Gold’s future significantly hinges on the US dollar’s status as the world’s reserve currency.
With discussions among BRIC nations (Brazil, Russia, India, China, and South Africa) about introducing an alternative to the US dollar and considering using gold to back this new currency, demand for gold could surge dramatically. Such a development could lead to a substantial increase in gold demand, significantly boosting its price.
The possibility of a new reserve currency backed by gold might propel gold prices to exceed $3,000 an ounce by 2030. Current projections estimate gold prices to range between $2,200 and $3,100 over the next half-decade.
Factors Influencing Gold Price Predictions
Gold’s role as a fundamental asset in the global economy means its price is influenced by various factors, which are crucial for strategists and analysts when making future gold price predictions.
One primary factor is consumption demand, which considers gold’s applications across different sectors. While traditionally used primarily in jewelry, gold is increasingly vital in modern electronics due to its excellent conductivity, making it a sought-after material in the industrial sector. Against the backdrop of limited supply, the robust demand from electronics manufacturers plays a significant role in shaping gold price forecasts.
Central bank demand is another critical consideration. Central banks worldwide purchase gold as a dependable wealth reserve to protect national reserves, and their market activity can significantly impact gold prices and long-term outlooks.
In the first quarter of 2024, the following countries bought some of the most gold.
- Turkey – 30.12 tons
- China – 27.06 tons
- India – 18.51 tons
- Kazakhstan – 16.39 tons
- Singapore – 6.57 tons
Gold’s appeal as a safe-haven asset during market instability means that it is often sought after during periods of economic uncertainty. The potential for a global economic downturn is another factor analysts consider when evaluating gold’s future value.
Inflation rates and their trajectories are also important in assessing gold’s worth in the future. With global central banks raising interest rates to combat inflation, gold prices may be negatively affected as investors turn to yield-bearing assets like government bonds and treasuries instead of gold.
Final Gold Outlook: Why Gold Mining is A Good Investment
Throughout history, gold has consistently been a reliable investment, especially during uncertain times and geopolitical unrest. Since the COVID-19 pandemic began in 2020, gold has appreciated over 30%, driven by investors seeking a dependable wealth reserve amidst global uncertainties.
Gold remains a substantial investment opportunity, particularly against inflation and potential global economic downturns, with its current support level above $2300 per ounce and future predictions suggesting prices exceeding $3000 per ounce by 2030. Its role as an inflation hedge and portfolio diversifier is undeniable, providing a buffer during economic downturns and stock market volatilities.
Ethical and environmentally friendly gold mining not only benefits companies but also surrounding communities. The World Gold Council highlights that responsible gold mining fosters sustained socio-economic development in regions rich in this precious metal. Pan African Resources exemplifies the benefits of prudent gold mining, employing advanced, energy-efficient technologies to enhance air and water quality, improve tailings reprocessing, and minimize environmental impact. The company’s commitment to safe, sustainable gold extraction underpins its success and long-term operational sustainability.
Africa’s vast yet underexplored gold resources position it as a key player in the global gold mining industry. Despite having fewer than 1,000 gold mining projects, the continent is ripe with opportunities for mining companies. While South Africa has historically been a gold production powerhouse, West Africa is now at the forefront, with countries like Ghana, Mali, and Burkina Faso becoming hotspots for mining and exploration activities.
Advanced technology and financial resources are unlocking deeper, high-potential sulphide ores, with significant deposits found in countries like the Democratic Republic of Congo, Tanzania, and regions like the Arabian-Nubian Shield.
Pan African Resources is at the forefront of gold mining in Africa as a mid-tier company, boasting a production capacity exceeding 200,000 ounces annually, with projections to hit 250,000 ounces per year once its new Mintails retreatment facilities are fully operational by 2025. The company possesses an extensive array of high-quality, cost-effective operations in South Africa and exploration ventures near Port Sudan in the Republic of Sudan, where initial findings are promising. It distinguishes itself by harmonizing its financial objectives with societal goals.
Therefore, Pan African Resources is committed to responsible gold mining, prioritizing support for local communities and environmental conservation. The company integrates sustainability into its core business strategy, recognizing it as essential for long-term success. Thus, it aims to produce high-margin gold efficiently and safely while reducing its environmental footprint, aligning with its ESG (Environmental, Social, and Governance) commitments.
Frequently Asked Questions
What will gold be worth in 5 years?
In 2023, gold reached a peak price of $2081 per ounce and has seen over a 30% increase in the past three years, indicating a strong upward trend. Predictions suggest that gold could hit $2500 per ounce by 2025. Factors such as market volatility, economic instability, and global geopolitical issues could potentially drive prices up to around $3,000 per ounce over the next five years.
Is gold a good investment?
Absolutely, gold is a prudent investment for those looking to benefit from its price growth. Various factors, including inflation, market volatility, and geopolitical instability, contribute to its value increase. Gold is a reliable wealth reserve and a strategic diversifier for investment portfolios, offering dependable protection against inflation. Historically, gold investments have often surpassed stocks, bonds, and many other asset classes in the long run.
What is the gold price forecast for 2024?
In 2024, gold prices will be above $2200 per ounce. This outlook is upheld by factors like the relaxation of monetary policy constraints in the US and a weakening US dollar, contributing to the optimistic projections for gold prices.
Will gold go up or down?
Like any globally traded commodity, gold prices are subject to fluctuations influenced by supply and demand dynamics. Despite these fluctuations, gold maintains a general upward trajectory. Periods of significant dips or sell-offs present buying opportunities, which can lead to substantial price recoveries.
About the Author: Neha Gupta
