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? This is the burning question as gold has faced challenges in surpassing this significant psychological threshold, failing three consecutive times. It’s hardly surprising that opinions on gold’s price outlook for 2023 are varied, especially after the metal hit a record peak in the early part of the year, only to experience a notable retreat.

Every attempt to reach the $2050 mark has been met with a sharp sell-off, leading to a significant downturn. With a fresh record set in the first half of 2023, the speculation is whether the gold price will drop further or will gold prices go up?

These are critical queries among investors as gold finds itself in a delicate state, with the potential to dip below the $1900 per ounce threshold, particularly due to the strength of the US dollar. As a result, forecasts for gold prices in 2023 are extremely diverse, with experts expressing differing opinions on the various 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 towards gold prices. Discussions about a new global currency to challenge the dominance of the US dollar also play a significant role in shaping future forecasts for gold prices.

Gold Price Action: Strong Resistance at $2080 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 led gold prices to break the pivotal $2000 threshold for the first time ever. After peaking at $2075, gold experienced a sharp decline, falling to around $1676.

Subsequently, there was a resurgence, with gold prices climbing to $2049 in March 2022. However, facing resistance at this crucial level, gold prices retreated to $1630 by November. This downturn was followed by another robust upward movement, with gold prices reaching $2046 in April 2023.

This spike above the $2000 mark marked the highest point for gold in the year, influenced by the prior year’s market trends. The market is now adapting to changing expectations around interest rates and the enduring strength of the US economy, which could afford the Federal Reserve the opportunity for further rate increases, potentially impacting gold prices negatively.

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, prompting investors to opt for safe havens like gold, while avoiding more volatile investments such as stocks.

As we move forward, gold’s upward momentum has diminished, and the metal has entered a bearish phase. Gold has been trading within a narrow band of $1900 to $1950 for much of the year and appears poised to fall below the $1900 mark as the year concludes.

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 now linger in a constrained range of $1900 to $1950, underscoring a pronounced sell-off whenever prices approach the $2000 mark.

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

Drawing from past trends, the outlook for gold appears to be leaning towards bearishness. 

  • The decline in prices 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 (Fed) 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 their higher yields, moving away from gold.

Although the Fed has halted rate hikes due to concerns over potential recession risks, the chance of rate reductions seems to be fading. Current economic data supports the strength of the US economy, allowing the Fed to maintain higher interest rates to achieve a 2% inflation target.

 

As the Fed is expected to maintain its stance on not lowering interest rates in the latter 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 lowered their gold price projection for 2023 to $1,923 per ounce, down from an initial $2,009.

    Conversely, Goldman Sachs is optimistic, predicting an average gold price of $2,078 for the third quarter of 2023, with an end-of-year forecast of $2,108, averaging $2,021 for the year.

    • Saxo Bank: 

    Saxo Bank predicts gold reaching a price of $3,000.

    • Standard Chartered: 

    Despite the discussion around why the gold price is going down, Standard Chartered has a forecast of $2,250 for gold in 2023.

    Projects a decrease in gold prices to around $1,600 by year’s end.

    • JP Morgan: 

    The team at JP Morgan expects gold to be priced at $1,860.

    • RBC Capital: 

    Targeted a gold price of $1,890.

    Analysts maintain a year-end average gold price forecast of $1,905, noting that gold is struggling to sustain gains above the $2,000 mark and might face further losses, especially if the dollar strengthens due to diminished expectations for interest rate cuts.

    As gold grapples with finding its footing beneath the $1950 per ounce mark, the potential for additional declines looms, particularly as the dollar gains momentum amidst diminishing prospects for cuts in interest rates.

Why is Gold Rising

Gold has depreciated by about 5% from its May 2023 peak of $2,046 per ounce. Early in the year, gold’s value was bolstered by its status as a safe haven during the banking crisis, with indications from the FED that it might halt rate hikes and a drop in inflation levels providing additional support. However, gold prices dipped below the $1,900 mark before showing signs of recovery, partly due to a weakening dollar.

The dollar experienced a pullback from its peak of 103.24 following a non-farm payroll report for June that fell below expectations, suggesting a potential slowdown in the job market due to high interest rates. The US economy added 205,000 jobs in June, fewer than the anticipated 229,000, leading to a sell-off of the US dollar.

This resulted in a slight increase in gold prices, which had been at risk of dropping below the $1,900 mark. A decline in the dollar index below 101 could further fuel an uptick in gold prices following its recent recovery to near the $1,900 level.

The significant downturn in gold prices can also be attributed to a decrease in net acquisitions by central banks. In the past year and extending into the early months of this year, central banks engaged in unprecedented levels of gold buying. This spree was a strategic move to safeguard their economies against rampant inflation and the instability of bond markets.

Additionally, the imposition of sanctions on Russian assets by the US and its allies compelled central banks to increase their physical gold reserves, thus spurring market demand. This led to gold prices soaring to an all-time high of $2,081. As a result, the demand for gold surged to a peak not seen in over a decade, with total purchases by central banks and robust investor interest pushing the figures to 4,741 tons in 2022, a significant rise from 3,678 tons in 2020.

Moving forward, gold purchases are expected to decrease in 2023, with Turkey becoming a net seller due to high domestic demand. This increased supply, coupled with reduced demand, has played a role in the decline in gold prices from above the $2,000 mark. Additionally, a 12% reduction in gold holdings at the Bank of England since 2021 has contributed to a surplus, further depressing prices.

Gold Price Forecast for 2024

Gold continues to face downward pressure, struggling to maintain its position above the $2,000 threshold. The recent downturn has brought gold prices to the vicinity of the 200-day moving average, a critical juncture that typically signifies a bullish stance when prices stay above it.

Conversely, a decline below the 200-day moving average could lead to a significant sell-off, potentially driving gold prices to close 2023 under the $1900 per ounce mark. Thus, a critical moment to consider selling gold in 2023 would be if prices fall below the 200-day moving average on the daily chart.

Current dynamics suggest a continuation of the bearish trend in gold prices, potentially leading to further decreases similar to the pattern observed when prices surged to record levels before undergoing a substantial correction below the $1800 mark.

However, 2024 presents a potential turning point where bulls might drive gold to new record highs, particularly after a significant pullback from current levels. A year-end closing below $1900 per ounce in 2023 could set the stage for a robust upward movement in 2024.

A key factor likely to fuel a rally in gold prices beyond the $2100 mark in 2024 is the anticipated relaxation of monetary policy by central banks. 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 moderate their pace of interest rate increases in 2024. A deceleration in monetary tightening is likely to benefit non-yielding assets like gold, potentially leading to a significant uptick in prices. 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 Boele, 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:

  • ABN AMRO:

Analysts at ABN AMRO predict that gold prices will average over $2000 in 2024.

  • ANZ Research:

Strategists at ANZ Research anticipate gold prices to climb to $2,200 by September 2024.

  • The World Bank:

Predicts gold to close 2023 around $1900, with a decline to approximately $1750 by the end of 2024.

Predictions for future gold prices are highly varied, as experts weigh a range of 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’ team of strategists believes the commodities sector’s bull market will persist for the next decade, suggesting a continued upward revaluation for gold, even considering occasional minor setbacks, 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, gold could potentially reach new heights of $2200 by 2025.

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 BRICs 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 a variety of 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. The robust demand from electronics manufacturers, against the backdrop of limited supply, 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.

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: Is Gold a Good Investment?

Throughout history, gold has consistently been a reliable investment, particularly during uncertain times and geopolitical unrest. Since the onset of the COVID-19 pandemic in 2020, gold has seen an appreciation of over 30%. This increase is attributed to investors seeking refuge in gold as a dependable wealth reserve amidst worldwide uncertainties.

Moreover, gold offers a strong investment opportunity against the backdrop of inflationary pressures and the potential for a global economic downturn. With its current support level above $1900 per ounce, there’s room for potential growth in value.

Looking towards the future, gold continues to be an attractive investment, especially with predictions suggesting an average price exceeding $2200 per ounce by 2030. Gold’s role as an inflation hedge is undeniable, maintaining its value and purchasing power over time. As inflation rates remain elevated, gold’s appeal increases among hedge funds and institutional investors.

Gold also serves as an excellent portfolio diversifier due to its inverse correlation with the stock market, providing a buffer during economic downturns and stock market volatilities.

Why Gold Mining is A Good Investment?

Ethical and environmentally friendly gold mining is not only beneficial for the companies involved but also for the surrounding communities. The World Gold Council highlights that responsible gold mining fosters sustained socio-economic development in regions rich in this precious metal.

Gold mining has been a critical economic contributor globally, offering direct and indirect employment opportunities, fostering local communities, and enhancing a country’s foreign investment and tax revenue when conducted with transparency and accountability.

Pan African Resources exemplifies the benefits of prudent gold mining. As a mid-tier mining entity, its African gold mines are recognized for being sustainable, safe, and high-margin operations. The company employs advanced, energy-efficient technologies to enhance air and water quality and improve tailings reprocessing, minimizing environmental impact. Their commitment to safe, sustainable gold extraction underpins their 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 opportunity 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 also found in the Democratic Republic of Congo, Tanzania, and the geologically rich Arabian-Nubian Shield. Pan African Resources is actively exploring in these promising regions, including near Port Sudan in the Republic of the Sudan, where initial findings are promising.

As gold prices trend upwards, exploration and investment in Africa’s gold sector are expected to surge, leading to more mergers, acquisitions, and exploration endeavors. Pan African Resources is at the forefront, aiming to increase its production capacity significantly while ensuring its operations are environmentally and socially responsible. The company’s dedication to sustainability is integral to its business model, emphasizing safe, efficient gold production with minimal environmental impact as part of its ESG strategy.

West Africa is becoming a leading region for gold mining, with countries like Ghana, Mali, and Burkina Faso drawing considerable attention for exploration and mining activities. Over the last two decades, the development of about 30 gold mines in West Africa has predominantly focused on surface-level oxide ores that are easier and cheaper to extract.

However, the potential for deep sulphide ores is attracting companies equipped with cutting-edge technology and substantial financial resources. Presently, West Africa is home to some of the biggest gold mines on the continent. There are also significant gold reserves in the Democratic Republic of Congo and Tanzania. Exciting new finds are occurring in the Arabian-Nubian Shield, extending from Saudi Arabia to Sudan in Eastern Africa, where there’s potential for vast, easily accessible gold deposits, similar to those being mined in Egypt. Pan African Resources has obtained promising exploration licenses near Port Sudan in the Republic of Sudan, with the initial findings showing great promise.

With gold prices on the rise, there’s an anticipated uptick in exploration activities across the continent, accompanied by an increase in mergers and acquisitions. Smaller, more nimble resource companies are racing to exploit Africa’s extensive gold resources.

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 in Sudan. 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 $2200 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 serves as a reliable wealth reserve and a strategic diversifier for investment portfolios, offering a 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 2023?

In 2023, gold prices are anticipated to maintain an average above $1900 per ounce. This outlook is buoyed 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?

Gold prices, like any globally traded commodity, 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.