Another week has brought another sovereign record of gold prices, both in US dollars and in Polish currency. According to analysts worldwide, it seems the good times for gold are not likely to pass quickly, and the boldest forecasts suggest that an ounce might be cost close to 5,000 USD in the next few years.
In the gold market last week, we recorded another ATH (so-called all-time high), another price record per ounce, both in terms of US dollars and also in Polish zloty. The current week also began with price increases. On Monday noon, the exchange rate exceeded 2730 USD and 10,890 PLN per 31.1 grams of gold.
Why is gold breaking records?
This is the effect of, according to analysts, firstly we have fully entered the stage of interest rate cuts, which always works favorably for gold. Secondly, the rate is affected by what is happening around the world, such as turmoil and ongoing tense situation in the Middle East, as well as the ongoing war in Ukraine.
Additionally, central banks do not intend to abandon the increase in reserves of the royal metal. Our National Bank of Poland has recently also bought gold and seems to be planning more purchases before the end of the year. We know this because Poland plans to increase its gold reserves to 20% of all reserve assets.
The Czech National Bank also says that it plans to increase its gold amounts, which it currently holds around 30 tons, to 100 tons. Similarly, other central banks in the world, which also intend to buy gold in the near future, announce purchases for the next few months or even several years.
Gold is growing like yeast
Last week in Miami, the largest producers and players in the LBMA gold market, the London Precious Metals Market Association, met. There, analysts also discussed what will happen in the coming months. And a clear majority of them believe that the coming year will also be very favorable for gold.
According to LBMA data, it is clear that the precious metal has been growing like yeast for quite some time. Just in the third quarter, its price recorded a 13% increase, and from 1 January 2024 to the end of September – almost 27%. The past quarter ended with gold at the level of 2629.95 dollars per ounce, breaking for the first time in history the 2600 USD/oz barrier.
In the longer-term perspective, counting from the minimum gold price at the level of 1618.20 USD at the end of the third quarter of 2022, when the Covid-19 pandemic was still ongoing, the Russian-Ukrainian war was in full swing, and interest rates were high, the increase during eight consecutive quarters was 62.5%.
The good times will not pass quickly
But that’s not the end, because, according to analysts, the value of gold will grow and approach 3,000 dollars per ounce within the next year. Bank of America explicitly says that gold is now becoming the last reserve of value worth investing in. Once upon a time, American bonds were considered such a safe asset, but the situation changed due to debt, which will be growing, also in connection with unrest throughout the world.
Countries are transferring more and more financial resources to armaments, so the fiscal deficit is growing, expenses are also increasing. And that will not change, because both candidates for the US presidential elections in no way intend to spend less, rather they plan to increase spending. Therefore, U.S debt will grow very rapidly in the near future.
And this will divert investor interest from formerly considered safe U.S bonds. And gold will become the last safe haven to which more conservative investors, who care about security, will escape. Therefore, time for gold – according to many analysts, including those from Bank of America – is and will be consistently good.
An ounce for nearly 5000 dollars?
Also, Incrementum AG analysts, whose forecasts seemed entirely fantastic not long ago but now turned out to be quite accurate, say that gold has a very strong foundation whilst its price continues to rise. They predict it will exceed 4800 dollars per ounce in the next few years. Exactly 4821 USD/oz – that is the price analysts of the company predict for the year 2030.
These same experts also calculated the probability distribution of price ranges which the gold rate may fall into in just over 5 years. The most likely price range is between 4 and 5 thousand dollars per ounce (18.6%), and between 3 and 4 thousand USD/oz (18.1%). The smallest chance is that the quotations of the royal metal will fall below 1 thousand USD (2%) or exceed 12.5 thousand USD (2.4%).
By Michał Tekliński, Gold Market Expert Goldsaver.pl, Goldenmark Group.
Source: https://managerplus.pl/dobry-czas-dla-zlota-szybko-nie-minie-cena-uncji-dojdzie-do-prawie-5-tysiecy-dolarow-36928
