Gold Price Prediction in Next 5 and 10 Years
After a decade-long bear market, the price of gold is beginning to rise. Its recent awakening occurred during the pandemic crash of 2020.
Since then, the price of gold has been on a steady rise. Therefore, many investors are wondering where the price of gold can go in the future. To help you gain a better understanding on the future price of gold, we have created both a five year and 10 year forecast on the price of gold.
Gold Price Forecast For the Next 5 Years
Gold Price Forecast For the Next 5 Years
Forecasting the price of gold over the next five years will be a little easier than considering a long-range forecast. That’s because the current economic conditions will give us a clearer idea of where the price of gold will go. Here are three factors to consider when forecasting the price of gold for the next 5 years:
Inflation
As of April of 2022, the current inflation rate is about 7% in the United States. We are also seeinginflation pressures in other places in the world. When there is inflation, the purchasing power of fiat currencies tends to go down. This causes investors to look at parking their wealth in more finite assets such as real estate, art and gold. If this inflation is not transitory, then we could see gold outperform other assets in the next five years.
US Public Debt
The US public debt nearing $30 trillion dollars. This is an astounding amount which is now 150% higher than the current US GDP. In the past, the growing US debt seemed to have little to no effect on the price of gold. However, that may change if the public debt continues to grow. Also, when the USD is being challenged as the reserve currency, we are in a very perilous situation. If we lose the petrodollar during this dollar decline inflation will skyrocket.
War
Perhaps the biggest wild card is war in Europe. We have seen wars in Europe explode into World Wars. If the Russian invasion of the Ukraine persists, it could roil stock markets. In the past, wars have been very bullish for gold.
Gold 5 Year Forecast
Considering that inflation may be around for longer than a couple of years, we could see gold move from its current price of $1,930 to $5,000/oz. in the next five years. If the US public debt becomes an issue, then the price of gold may hit beyond $5,000 per ounce. In the unlikely event of global war, the price of gold could explode up to $10,000 per ounce in five years.
Gold Price Forecast For the Next 10 Years
Looking out 10 years into the future can be a little more difficult because it can be harder to predict what may happen. However, there is one factor that we can look at, long-term trends. Bull and bear market cycles in the precious metals market tend to last about 10 to 20 years. Here’s a look at the current market cycles of gold in the last 50 years:
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1970 to 1980 Bull Market
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1980 to 2000 Bear Market
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2000 to 2010 Bull Market
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2010 to 2020 Bear Market
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2020 to Present Bull Market
During the bull market of the 1970s, the price of gold went up from $35 an ounce to $500 per ounce. This was a 1,600% move. During the bull market of the 2000s. The price of gold moved up from $280 to $1,420. This was a 600% move. In 2020, the price of gold was $1,773. Currently, the price of gold is $1,930. That’s a 10% move in the last 2 years. If we split the difference between the last two bull markets. It is possible that the price of gold could make a 1,000% move in the next ten years from its 2020 price. That could put the price of gold at $17,000 by 2032.
The Importance of a Price Forecast
Gold price forecasts should not be definitive since events in the future can change. However, you can use gold forecasts to better allocate funds in your portfolio. For instance, if you believe that there is a bull market in gold, then you can add a little more to your gold holdings.
Understanding the Future of Gold
Gold, like many assets, moves in cycles driven by events and economic factors. When gold is in a bull market, its moves can be dramatic. Therefore, it is important to consider some allocation in gold to take advantage of any potential upward moves.
Posted by:
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com