Amidst the economic crisis and existing inflation, every natural mineral resource and gas has since seen a haphazard motion in demand and supply. The aftermath of the pandemic has taken quite a toll on the market value of goods and other commodities. The natural metal, gold, isn’t left out. For long-time investors, gold is a form of financial security when other entities do poorly in the market. Gold is regarded as the cryptocurrency of the ‘boomers.’
Since the pandemic, gold prices have been under pressure from primary buyers and investors, especially the central bank. To curb the insurgent inflation, the central banks and the US Federal Reserve are hiking the prices of gold in the market. Such action is primarily due to the war between Russia and Ukraine in 2022. Some experts are keen that the high rate might continue up until 2023 in a fit to curb inflation. While others believe it might decline in price.
Gold Chart: How High Can Gold Prices Go?
Gold has risen exponentially since the late 90s. Many predict that the yellow metal might traject to a $5000 mark or even $8000. In March 2022, gold rose to $2,050 amid the Russia-Ukraine war. Gold has been a security asset adored by many investors due to its non-changing nature. No matter the condition of its market value, it’s a significant asset to include in your profile.
In 1980, the gold market value witnessed an unpredictable hike. It sold for $850 per ounce, and this rise was due to inflation, and the result of the Iranian revolution. It prompted investors to buy other metals. Today, many are worried that the events of the late 90s could be repeating themselves. By the historical changes in gold prices, one could try to predict what the future holds for the yellow metal.
When Russia attacked Ukraine on 24 February 2022, the gold price declined but subsequently rebounded stronger and kept on increasing in price. Despite the haphazard nature of the metal, it still did better than most assets in the market. After the Fed’s hike in March, it raised the fund’s rate by 3%. During the second quarter of 2022, gold faced several challenges due to inflation and a fast-rising recessive atmosphere which saw it fall below $2000 per ounce.
Gold is one commodity that has proven that it doesn’t follow the rules of demand and supply. There is no such thing as the right time to buy gold. The best time is now. If there is anything market prices have taught us in the late ’90s is that gold does excellently well during an inflation period. The federal reserve has held a firm grip on the heightening prices of gold. The question in everyone’s mind is, would the bullion metal escalate or surpass the $3000 per ounce mark?
In December 2009, gold rose over the $1000 mark an ounce. It was selling for $1200 due to the dollar drop. In 2011, gold heightened to the $1500 mark with the backing of the soviet debts and a fall in dollars.
Over the last 3000 years of gold trading, the event that occurred in March 2022 has never been witnessed in history. Core CPI inflation began in march, and many wonder if it’s safe to invest in the market. In 2021, the U.S Congressional Budget Office had a mild overview and projection that the average interest rate on federal debt would sporadically increase from 1.4% in 2022 to 2.7% by 2031.
Due to high interest and debt rates, the CBO is quite hopeful that by 2024 the CPI will decline by 2024. All these can be possible if the Fed does reduce its price hikes. It’s not a surprise as the US environment has been facing negatory gold price hikes since the early 70s till date.
What will gold be worth in 5 years?
Everyone has a separate school of thought regarding gold and its market value. Some may enjoy the price hike, while others seeking to buy gold may want its value to depreciate a bit. Experts expect gold prices to ease when the war between Russia and Ukraine comes to a halt. Gold is forecast to fall to $1,700 in 2024 and drop further to $1,600 if all factors comply with the financial constants.
The World Bank forecasts that if inflation reduces, gold prices may decline to $1,905. Other financial experts foresee a $3,000 mark by the end of 2027 if measures aren’t taken to combat inflation. However, it’s important to note that the gold market is a volatile one. It’s hard to predict gold prices over time as several commodities greatly influence them.
Is it smart to buy gold right now?
The question remains a daunting one as food commodities are at an increase and inflation keeps surging ahead. One factor that can’t be overlooked is Russia’s influence on the metal.
Russia is one of the largest gold-mining countries in the world. Since the war with Ukraine began, gold has been quite unstable in the market, unlike its nature. Gold is the physical bitcoin of the generation as it prides itself on economic stability more than most virtual metals. Many of the commodities have been sold and offloaded to sustain the economy as they’ve been pulled out from various world trade unions. In a bid to maintain economic activities, utilizing their resources seems like the only way out to financial freedom.
Due to this action, the World bank is wary of the Russian central bank. If they decide to offload all their gold when the economic climax is reached, the price might slope before 2023.
Other sources are beginning to think that Russia may utilize the yellow metal as a backup currency in case its current note deflates. Even though it’s not a precise fact, if they decide to go ahead, it might mean gold will increase exponentially.
If the war between the nations continues, inflation will increase, and Russia will have no choice but to back up its currency. This could mean that gold as a commodity might surpass the $3000 per ounce mark, experts predict, but the year’s end.
Gold prices change every minute and second. Finding the most reliable and trustworthy media can be overwhelming. As they say, make hay while the sun shines. Don’t wait for gold to reach a spike before purchasing the long-term asset. As global unrest escalates, it’s a gray hour for gold prices.
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Call the gold experts at American Bullion for any consultation or advice. Contact us at (800) 531-6525.