Gold Price Predictions For Next 5 Years
When looking at the potential price of gold over the next five years, there are a lot of factors that could propel it higher. Thats one advantage gold ownership offers: it isnt about one factor or another, its about any factor that increases fear or uncertainty on the part of investors. And there are a lot of risks surrounding us at this point that could cause any type of crisis.
But probably the biggest catalyst right now is monetary dilution. When a currency is debased, it makes real assets like gold more valuable, since they cant be created with a few computer key strokes.
And the U.S. now has both monetary stimulus and fiscal stimulus. Monetary stimulus usually goes first to the banking system and ends up inflating asset prices. But fiscal stimulus are funds injected directly into the economy and immediately spent. Its like me giving you $100 and you deposit it in a savings account vs. spending it that day on groceries.
You probably dont need me to say it, but the U.S. doesnt have trillions of extra cash to spend on fiscal stimulus packages. It already cant balance a budget. Some claim theyll collect on the backend as jobs are created and the economic grows, tax revenue will increase. But the debts and deficits are so high now theyre mathematically unpayable. And history clearly shows they will lead to inflation .
Where will the funds come from for these stimulus programs? They have to be , which will add to the already bloated deficit.
Will Gold Price Go Up In 2021 After A Historic Year
Gold investors experienced a turbulent 2020 with the price of the commodity crashing hard and fast during the peak of the Covid-19 selloff. Gold not only rebounded sharply but it also hit a new all-time high and anyone holding gold in January exited 2020 with their precious metal worth more.
So will gold price rise once again in 2021? Lets take a quick recap of golds performance in 2020 and perform a brief gold technical analysis to see whats around the corner.
Is The Gold Price The Same As The Spot Price
When looking at gold prices, the figures quoted are typically going to be spot gold prices unless otherwise specified. The spot gold price refers to the price of gold for delivery right now as opposed to some date in the future. Spot gold prices are derived from exchange-traded futures contracts such as those that trade on the COMEX Exchange. The nearest month contract with the most trading volume is used to determine the spot gold price.
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What Is The Difference Between An Ounce And A Troy Ounce When Looking At A Gold Chart
A troy ounce is used specifically in the weighing and pricing of precious metals and its use dates back to the Roman Empire when currencies were valued in weight. The process was carried over to the British Empire where one pound sterling was worth one troy pound of silver. The U.S. Mint adopted the troy ounce system in 1828.
A troy ounce is about slightly heavier than an imperial ounce by about 10%. An imperial ounce equals 28.35 grams, while a troy ounce is equal to 31.1 grams.
Evaluating A Gold Trade Into 2021
As 2021 is just around the corner, lets take a look at the 2020 gold chart to see if it offers any clues on how to approach a gold trade.
The chart does show a run higher towards the August highs and then a loss of momentum as gold traded near the $1,760 level in November. But the resilient commodity started to stage a rebound from its multi-month low and recovered around $100 an ounce to trade near the $1,860 level.
The near-term picture does show several instances of weakness since the summer months so perhaps keeping the support levels in mind before entering a trade is a good idea.
Investors should expect the first support level of $1,760 could fail to hold if gold moves sharply lower due to some unforeseen reason. However, the next support level of $1,670 has worked as expected from April to June as gold prices bounced back higher after hitting these levels.
This begs the question: will the price of gold go up? No market moves in a straight line higher for ever so near-term drops are far from unusual. Expectations for gold to retest it’s all-time highs in 2021 could be a base-line scenario for many investors and could be realised if a strong break above the $1,900 level is seen.
If you would like to have a clear vision of how to make a trade on the gold market right now, take a closer look at our detailed gold price analysis in a short video by Capital.com market strategist David Jones.
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Whats The Price Of Gold Per Ounce
The price of Gold can fluctuate based on market conditions, supply and demand, geopolitical events and more. When someone refers to the price of Gold per ounce, they are referring to the spot price. The spot price of Gold is always higher than the bid price and always lower than the ask price . The difference between the spot price and the ask price is known as the premium of Gold per ounce.
Why Do Investors Care About The Gold Price
As with any other type of investment, those looking to buy gold want to get the best deal possible, which means buying gold at the lowest price possible. By watching gold prices, investors can look for trends in the gold market and also look for areas of support to buy at or areas of resistance to sell at. Because gold pretty much trades around the clock, the gold price is always updating and can even be viewed in real time.
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What Is The Price Of Gold Today
Todays spot price of Gold, like all days, is constantly changing according to supply and demand, market conditions, geopolitical forces and many other variables. However, todays price of Gold could also refer to the total percent change of the spot price, as calculated relative to the price at the start of that trading day.
Is The Live Gold Price Just For The Us
Gold is traded all over the globe, and is most often transacted in U.S. Dollars. Gold can, however, also be transacted in any other currency after appropriate exchange rates have been accounted for. That being said, the price of gold is theoretically the same all over the globe. This makes sense given the fact that an ounce of gold is the same whether it is bought in the U.S. or Asia.
The price of gold is available around the clock, and trading essentially never ceases. While investors in the U.S. are sound asleep, for example, gold trading in Asian markets may be robust. The market is very transparent, and live gold prices allow investors to stay on top of any significant shifts in price.
The current gold price can be readily found in newspapers and online. Although prices per ounce in dollars are typically used, you can also easily access the gold price in alternative currencies and alternative weights. Smaller investors, for example, may be more interested in the price of gold per gram than ounces or kilos. Larger investors who intend to buy in bulk will likely be more interested in the gold price per ounce or kilo. Whatever the case may be, live gold prices have never been more readily accessible, giving investors the information they need to make buying and selling decisions.
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Gold Price Forecast For 2022 And Beyond
Forecasts for the gold price outlook next year from different analysts vary, based on how they expect the market to respond to inflation and central bank policy.
Technical analysis from brokerage firm Zaner on 8 December noted that key points on the upside in gold are the 200-day moving average at $1,796.25 and then again at $1,800.
But, even though we leave the bull camp with a minor edge, the precious metals markets lack a definitive bullish fundamental storyline and lack upside momentum. Furthermore, recent gains have been forged on extremely low trading volume and almost no change in open interest, the companys analysts wrote in a note to clients.
Analysts at Australian bank ANZ expect gold to find support in the first half of next year but undergo downward pressure later in the year when the Fed is expected to raise interest rates. They wrote in their latest commodity report: As ultra-loose monetary policy nears an end and stimulus starts to shrink, support for the precious metals sector likely to wane in 2022. Despite more than a year of US Federal Reserve discussions around tapering, higher inflation and negative real interest rates have protected the downside of gold prices.
They added: In fact, with both an accelerated taper and more than three rate hikes already priced in for 2022, the balance of risks for gold positioning remains to the upside, as geopolitical risks and virus risk could catalyse a positioning reshuffling.
What Is Gold Spot Price
The spot price of gold is the most common standard used to gauge the going rate for a troy ounce of gold. The price is driven by speculation in the markets, currency values, current events, and many other factors. Gold spot price is used as the basis for most bullion dealers to determine the exact price to charge for a specific coin or bar. These prices are calculated in troy ounces and change every couple of seconds during market hours.
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Gold Price Prediction Chart
Ive compiled gold price predictions from a number of banks and precious metals analysts.
The table below shows the gold price prediction from various consultancies and independent analysts. Not all gave a forecast for both time periods, but Ive listed what theyve stated publicly. Heres what they think is ahead for gold.
You can see that most analysts predict gold will exceed $2,000 per ounce in 2021. Two project it will average in the $1,900-range. And of those I found, all are very bullish long-term .
A couple interesting points to highlight from these analysts
CPM Groups projection is lower than most, but if gold averages $1,922 in 2021, it would represent an 8.2% increase over 2020 and a record annual average. They also state that we expect prices to rise sharply at some point in the future, to new records significantly higher than $2,000. Such an increase would be expected to be caused by investors buying increased volumes of gold in a future economic and political crisis the period 2023 2025 is perhaps the most likely time period to expect such.
Meanwhile, well note that analyst Ross Norman has won first place in the LBMA gold price survey nine times. He predicts gold will rise 20% this year.
Last, the average 2021 gold price forecasts from these analysts is $2,228.
So what is my 2021 gold price prediction? To answer that question we have to look at the various factors that are likely to have the biggest impact on the price, both positive and negative.
I’ve Heard That Gold Traded 24/7 Is That True Is There An Open And A Close
Gold, actually trades 23 hours a day Sunday through Friday. Most OTC markets overlap each other there is a one-hour period between 5 p.m. and 6 p.m. eastern time where no market is actively trading. However, despite this one hour close, because spot is traded on OTC markets, there are no official opening or closing prices.
For larger transactions, most precious metals traders will use a benchmark price that is taken at specific periods during the trading day.
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How Are Gold Coins Prices Set
Gold coins are a very unique investment. They are sometimes considered legal tender and are produced and recognized by the issuing government. The coins are always labeled carefully with the correct year of issue, the gold purity, and the weight of the coin. Gold coins prices fluctuate daily, as they move separately from the stock market. Gold coin prices can be affected by several different factors. Factors like rarity, shifts within the money market and the stock market, a recession, or the threat of a recession, elections, political movement, or even geopolitical issues. These are all factors that can influence the price of gold coins.
Gold Futures And Paper Gold Faq
What is a gold futures contract?
A gold futures contract is a contract for the sale or purchase of gold at a certain price on a specific date in the future. For example, gold futures will trade for several months of the year going out many years. If one were to purchase a December 2014 gold futures contract, then he or she has purchased the right to take delivery of 100 troy ounces of gold in December 2014. The price of the futures contract can fluctuate, however, between now and then.
If I want to buy gold, couldnt I just buy a gold futures contract?
Technically, the answer is yes. One could purchase a gold futures contract and eventually take delivery on that contract. This is not common practice, however, due to the fact that there are only certain types of gold bullion products that are considered good delivery by the exchange and therefore ones choices are very limited. In addition, there are numerous fees and costs associated with taking delivery on a futures contract.
Isnt buying shares of a gold ETF the same thing as buying bullion?
Although one can buy gold ETFs, they are not the same as buying physical gold that you can hold in your hand. ETFs are paper assets, and although they may be backed by physical gold bullion, they trade based on different factors and are priced differently.
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Why Are Gold Prices Always Fluctuating
The price of gold is in a constant state of flux, and it can move due to numerous influences. Some of the biggest contributors to fluctuations in the gold price include:
- Central bank activity
- Jewelry demand
- Investment demand
Currency markets can have a dramatic effect on the gold price. Because gold is typically denominated in U.S. Dollars, a weaker dollar can potentially make gold relatively less expensive for foreign buyers while a stronger dollar can potentially make gold relatively more expensive for foreign buyers. This relationship can often be seen in the gold price. On days when the dollar index is sharply lower, gold may be moving higher. On days when the dollar index is stronger, gold may be losing ground.
Interest rates are another major factor on gold prices. Because gold pays no dividends and does not pay interest, the gold price may potentially remain subdued during periods of high or rising interest rates. On the other hand, if rates are very low, gold may potentially benefit as it keeps the opportunity cost of holding gold to a minimum. Of course, gold could also move higher even with high interest rates, and it could move lower even during periods of ultra-low rates.
What Is The World Gold Council
Founded in 1987, the World Gold Council is the market development organization for the gold industry responsible for stimulating demand, developing innovative uses for gold and taking new products to the market. Based in the U.K., the WGCs members include major gold mining companies. There are currently 17 members including Agnico Eagle, Barrick Gold, Goldcorp, China Gold, Kinross, Franco Nevada, Silver Wheaton, Yamana Gold and more.
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When Is The Gold Price The Strongest
It can be difficult to predict the next major rally in gold as it is strongly driven by sentiment. Gold does well in period of high uncertainty, a shifting inflationary environment and during periods of currency debasement however, historically, there have been high and low seasonal period in the gold market. Historically, September is golds strongest month. Many western jeweler start to build their gold inventories during this time to prepare for the holiday season. The next strongest month is January, which traditionally sees strong buying among Eastern nations ahead of the Lunar New Year. The worst month has historically been March, April and then June.
Gold Prices Between 1999
Anytime there is market uncertainty caused by geopolitical problems, gold prices rally. This explains why the gold prices skyrocketed in the first decade of the 21 century.
Between 1980 and 2000, gold prices fell but not at a steep rate.
In 2000, before the dot com excitement started, gold was trading for just $272.65 per ounce. However, from 2001, the country experienced an economic recession accompanied by the fateful 9/11 attacks. And as all investors do in the time of crisis, everyone started buying up gold.
Although this rise can be attributed to the panic that the economy was crashing, the prices of gold still increased at a steep rate even after the stock market started a new rally.
In 2007-2008, there was a severe worldwide economic crisis known as the global financial crisis . This economic crisis also contributed to a spike in the prices of gold. The yearly average was $ 871 per ounce in 2008. The financial crash of 2008 added to the demand, and over the next four years, prices were at an all-time high.
This year the price reached a high of over $ 1000 per ounce since the gold trade began.
The following year gold reached an all-time high with an average yearly price of $ 1,134 plus a high of $ 1,212 per ounce. But that was not the end.
Gold prices continued to increase. And in 2010 there was an all-time high price again of $ 1431 at the close of the year.
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