Gold Price Prediction & Long-term Forecast
26 Feb 2025
Gold — is the oldest financial asset. Over the millennia, it has lost neither its popularity nor its purchasing power. The price of an ounce covers the same set of goods as before Christ.
Gold was originally valued for its beauty and chemical properties. Nowadays, investors are interested in buying the precious metal because of its reputation. It is considered an instrument that can protect money from inflation.
The second reason for gold's popularity is its low correlation with stocks. Physical gold is one of the safe haven assets. This makes it an important component of a conservative portfolio. However, this factor is gradually receding into the background. Recently, the correlation has been growing compared to the indicators of the XX century.
Metals have several differences from other investment instruments:
- The asset is in demand in many spheres. Due to this its value theoretically cannot fall to 0.
- No counterparty risk. Unlike stocks and bonds, gold bullion is nobody's obligation.
- No cash flow. The metal does not generate profits on its own. Therefore, the investor does not receive dividends. An asset has to be sold to earn money.
The future price of gold largely depends on the expectations of market participants. Traders are more active in gold trading during periods of banking crises, etc. Demand grows as people believe that the metal will retain the purchasing power of money.
Most of the deals take place involving derivatives and "paper" gold. The latter are funds' stocks, which make money on the growth of the price of an ounce. Direct investments in bars and coins are used only by long-term investors.
- The long-term gold forecast 2050 is bullish. There are predictions that the price of an ounce may exceed $50 thousand.
- High demand is the main driver of quotations growth. It is observed both on the part of central banks and retail investors.
- Long-term price 2025-2030, US$ 3381.41 per ounce.
Source: BeatMarket