Latest Gold Price Forecast & Predictions
Period | 2 Days | 3 Days | 1 Week | 2 Weeks | 1 Month |
---|---|---|---|---|---|
Change | -2.10% | -0.89% | -3.91% | -3.85% | -7.71% |
Gold Price Forecasts - Analyst Predictions
Gold Forecast Short Term
Gold Forecast 1 Year
Gold Forecast 3 Years
Featured Gold Price Forecasts
As precious metals investors, it can sometimes be difficult to tell whether major world events are positive or negative for the prices of gold and silver.
However, a repeating pattern is now playing out in the gold market – a pattern which also appeared once before, nearly 10 years ago – which suggests that recent world events will be highly supportive for gold prices in the future.
Let us examine these world events and then turn to our expectations for gold prices in 2021 and beyond.
World Events – Bullish or Bearish for Gold?
Are escalating Coronavirus cases negative for gold prices, since business shutdowns are deflationary and hence cause a boost for the value of the US dollar?
Or are escalating Coronavirus cases positive for gold, since they eventually mean more government stimulus and bailouts, which are in turn negative for the value of the US currency?
Is President Trump’s expected departure from office next month good for silver prices or bad for silver prices?
How are we to know?
Amidst the intensity of world events as of late, there is one way in which we can cut through the noise and identify what is really happening in the world, and how it should impact our decisions as investors. And that is: to focus on price.
Price Contains All Knowledge
After all, price contains the sum of all participants’ knowledge in a market. Buyers, sellers, investors, traders, pumpers, short-sellers, manipulators, hedge funds, banks, sovereign wealth funds, and central banks must all come together at one single point in the market: the current price.
Price contains the sum of all knowledge regarding the market at a given moment. By studying price, and trends in price, we can discover what a market is really expecting...
The full-year 2020 was a wild year for gold.
After a strong 2019, the gold price took a hit in March 2020 as global liquidity evaporated and real interest rates spiked. However, the inevitable policy response of rate cuts, massive QE, and huge fiscal deficits quickly unwound that deflationary crunch and sent many risk assets soaring, and gold was well-positioned to ride that wave to new highs. Then, in August 2020, real Treasury rates began to rise, which led to a healthy correction in the gold price from near-term overbought conditions.
Based on my core gold model, which compares the gold price to broad money supply per capita (normalized to 1973 and 1995 as my baselines), gold is approximately fairly-valued, with good long-term return potential in the years ahead.
This following custom chart shows my model. The blue line is broad money supply per capita, and the red line is the gold price, and both of them are normalized to 100 in 1973. The thin green line, for additional context, is the real 10-year yield, which means the 10-year Treasury bond interest rate minus officially reported consumer price inflation:
Chart Source: St. Louis Fed
Over the long run, gold has a tendency to keep up with monetary inflation. Or, perhaps a more accurate way to put it, is that the dollar has a tendency to devalue against gold at roughly the rate that it is increased per capita, while gold holds its purchasing power. When the gold price gets way above the broad money supply line on the model, it means it’s historically...
I saw the potential for market-changing news over the weekend, but I did not expect it to be on the vaccine front. Pfizer announced a successful vaccine, and gold is plummeting.
Our cycles supported a turning point in precious metals around November 6th (+/- a few trading days). I assumed it would time a low aligned with our 6-month target. Today's market action to the vaccine suggests that instead of a low - gold inverted and formed a high overnight. The election fiasco kept gold elevated long enough to force the cycle to invert. Subsequently, gold pushed its 6-month low into the last half of December.Â
GOLD 4-HOUR
Gold prices plummet after Pfizer announced a vaccine that was reported to be 90% effective. This news event forced an inverted cycle, and we expect an initial collapse to $1810 - $1820 (beginning now).
Updated 6-Month Target
Today's inverted cycle peak supports a December target surrounding $1750 for an ABC measured correction. At least that is my initial impression, given today's action. We will know more over the next 48-hours. Â
After an initial collapse to $1810 - $1820 (beginning now). We could see a 3 to 4-week consolidation followed by and a final drop in the last half of December.Â
*********
More Gold Price Forecasts
Gold Forecast FAQ
How do you forecast the price of gold?
Predicting gold prices can be said to be both a science and an art. For example, analysis of gold supply and demand is scientific and completely objective whereas aspects of technical and sentiment analysis of the current gold market can be more of an art as it relies on the skills and perspective of the gold analyst.
Generally speaking, when the focus of the gold forecast is longer term then analysis of the fundamentals, ie scientific analysis, comes to the fore.
For shorter-term predictions of gold prices, the price of gold in the coming weeks and perhaps few months, technical analysis of past and current gold prices, market trends, as well as current market sentiment can be more actionable predictors. Here, the fundamentals can still play a role but generally serve more as background details.
What are the key factors for long term gold forecasts?
When forecasting what may happen to the price of gold longer term, there are many things to consider including economic trends, the impact of current and expected monetary policy, QE, debt monetization, and the aggregate impact on future currency valuation.
Does the price of gold go up when the stock market goes down?
The price of gold is often negatively correlated to the stock markets. When the markets go down, gold prices usually go up. However, this is not always true. Sometimes the price of gold and stocks both go up and down in unison. Fundamental factors play an important role and need to be carefully analyzed. Historically, however, the price of gold is not tied to the fluctuations of stock and bonds. This is one of the chief reasons when one should have gold in their portfolio – to protect the long-term value of your investments.
Does the value of the US dollar predict the price of gold?
As gold is traditionally quoted in US dollars, the price of gold is negatively correlated to the strength of the USD. The weaker the US dollar, the cheaper it is to purchase gold. Therefore, if economic factors predict a strengthening of the US dollar then this will tend to drop the price of gold, and vice-versa. According to the statistics (since 1973), the long-term correlation between the U.S. dollar index and the gold prices is -0.6 so this link is quite strong.
How do US interest rates impact future gold prices?
The level of US interest rates is an important driver of future gold prices. When investing in gold, the investor is faced with the opportunity cost of gold - a non-interest bearing asset. The higher the US interest rate for holding US dollars or investing in Treasuries, the higher the opportunity cost of holding gold. It is more likely, therefore, that a rally in the price of gold will be forecasted the lower the US benchmark interest rate.