As of the middle of August 2024, the price of gold has risen about 22%. The gold price forecast from most analysts indicates that this upward trend in the gold spot price may continue.
Strong buying by central banks and investors has consistently driven prices higher. Those trends, too, are expected to continue as the U.S. eyes at least one possible interest rate cut through the end of 2024, driving additional investment in gold exchange-traded funds.
Gold has set highs in five different months throughout 2024: March, April, May, July and August. On Aug. 20, it rose to $2,530.30 per ounce. Some investors are buying and taking advantage of the appreciation, whereas others are wondering whether to buy now or wait to see if the price drops.
Here’s a look at the gold price forecast to help you make an informed decision about your approach to investing in gold.
History of Gold Prices
Societies have valued gold for its beauty and rarity for a long time. In ancient times, the yellow metal was used as currency before becoming the precious metal that backed the currencies of many nations. Numerous countries adopted the gold standard in the 1800s, stabilizing the price of gold and fixing the exchange rate.
The Bretton Woods Accord in 1944 shifted gold’s role yet again. Many countries at the time agreed to tie their currency to the U.S. dollar backed by gold at a fixed rate of $35 per ounce.
However, that changed dramatically in 1971 when U.S. President Richard Nixon ended the Bretton Woods arrangement. As a result, central banks and foreign governments could no longer exchange U.S. dollars for gold at a fixed rate, causing the price of gold to fluctuate.
In times of market turmoil, investors turn to gold as a haven and store of value. They use it to diversify their portfolios as a hedge against inflation, interest rates and a devaluing U.S. dollar.
Between 1971 and 1980, the price of gold rose from an average of $43.15 to $850 per ounce. This rise was largely in response to high inflation, the Iran revolution and the Soviet invasion of Afghanistan.
The global financial crisis of 2008 pushed gold even further, climbing to an average price of $1,011 per ounce. In 2020, gold pushed past $2,000 an ounce due to economic fears at the time, fiscal stimuli and low interest rates.
Central banks and investors continue to look to gold as a haven amid economic uncertainty and wars in the Middle East and Europe. With its low correlation to other assets, gold can diversify your portfolio against the risk of losing its value.
Gold Price Forecast: 2024–2029
The gold price forecast comes from analysts evaluating fundamental, historical and technical elements. These include the continued purchasing of gold by global central banks and investments from people looking for havens.
That forecast shows gold continuing to rise between 2024 and 2029. With inflation falling but sticking around and possible interest rate cuts on the horizon, here are predictions for gold’s rise by 2025:
- ING expects markets to trade gold at around $2,300 per ounce.
- ANZ Research has forecast gold to rise to $2,593 per ounce.
- Lukman Leong predicts gold to be worth $3,000 an ounce.
Ongoing global conflicts are thought to put upward pressure on gold prices.
Gold Price Forecast: 2030–2035
Few analysts are willing to deliver a gold forecast beyond five years, but most remain bullish on the yellow metal. Economic uncertainty lingers similarly to the 2008 financial crisis. It could play a role in gold’s price as investors look to preserve spending power during inflation and find gold even more attractive as interest rates recede.
Geopolitical tensions show no signs of diminishing. And central banks, especially those in developing countries, are buying gold to support their economies.
Factors That Can Affect Gold Prices
Gold prices can be volatile and are impacted by many factors. Here are the three main groups of factors that can affect gold prices.
Macroeconomic Factors
For investors, gold can represent a haven and a store of value. Macroeconomic factors such as inflation and interest rates can impact economies and markets, especially those in the U.S.
Investors continue to buy gold to hedge against inflation, which has dropped but remains sticky. They also anticipate the Federal Reserve to begin lowering interest rates, which could make gold a more attractive investment.
Gold and the U.S. dollar have an inverse relationship. As the dollar weakens, gold prices rise. If investors look to riskier investments, the dollar may weaken, contributing to a rise in gold prices.
Geopolitical Factors
On Oct. 7, 2023, Hamas committed a surprise attack inside Israel. This led Israel to retaliate with a strong show of force against Hamas members reportedly hiding among the Palestinian people in the Gaza Strip.
Israel’s response has drawn fire from other rebel groups in the Middle East, particularly Hezbollah in Lebanon and Houthi from Yemen. Continued bombings, retaliations and assassinations of officials are driving tensions and threats of wider global discord.
This ongoing conflict is happening alongside continued fighting in Europe from Russia’s 30-month invasion of Ukraine and unprecedented tariffs and trade restrictions between the U.S. and China, the world’s biggest economies. These geopolitical tensions impact investor behavior, leading to gold’s appeal as a haven asset.
Technological and Industry-Specific Factors
Technological advancements in mining equipment and methods have changed the landscape of gold mining. These improvements include:
- More efficient heavy equipment
- GPS and remote sensing
- Natural and biological chemicals
These inventions have improved the extraction and processing of gold, increasing output while lowering the environmental impact. Demand still outstrips supply, though, supporting rising gold prices.
The use of gold in the consumer industry also contributes to the price of gold. Gold’s use in jewelry and electronics, particularly in China and India, contributes to gold demand and its pricing.
The Outlook Shines Bright on Gold as an Investment in the Future
From ancient times to now, people have valued gold for its rarity and beauty. It also has long been held for its store of value, and investors prefer it as a hedge against inflation amid economic turmoil. Geopolitical tensions, economic uncertainty and industrial demand are expected to continue into the foreseeable future as well.
After considering these and other factors, many analysts are predicting the price of gold to continue to hit new highs. As a result, gold could be a preferred investment for years to come.
Frequently Asked Questions
What is the forecast for gold price?
Most analysts forecast the price of gold to continue to rise; however, it’s hard to predict the price when so many factors, including U.S. inflation, interest rates and a global liquidity crisis, can influence it.
What will gold be worth in 2025?
While some analysts predict gold will drop to $2,075 in 2025, others forecast the price of gold to be worth an average of $2,600 per ounce in 2025.
Is now a good time to buy gold?
The price of gold is relatively high, but trends show that it could grow higher. Gold also remains a haven for investors. Waiting to buy could leave you priced out of the market, and buying now could hedge against persistent — although lower — inflation and a devaluing U.S. dollar.