What’s the gold price outlook as banks and analysts raise projections?
Gold prices are rising at an eight-year record high today. Observers forecast continued strides for the precious metal in the medium term.
Gold prices are up 0.4% today, moving above $1787, having climbed more than 17.8% since the beginning of the year and more than 3.3% month on month. Still, analysts believe the precious metal price will rise in the short term as in the long term.
How high can the gold price go in the short term ?
'We have seen another leg higher for the gold in early trading, building on the gains made over the past week', explains Chris Beauchamp, chief market analyst at IG in his last analysis.
'The dip to $1750 provided a brief but, as it turns out, strong entry point, powering the price to its highest levels since 2012. This uptrend is still firmly intact, and we are not yet seeing the kind of lower highs and lower lows that would suggest a near-term pullback is at hand'.
On a fundamental side, 'the charts are giving a good indication of what is going on in the real world. We do see gold to break out over $1800 an once', said last week John Meyer from SP Angel to IG TV’s Jeremy Naylor.
'Commodities trading hedge funds are positioning for this bullish trend', which is based on 'a combination of weak dollar, problems with gold mines due to lockdowns and Covid-19 issues', he added.
Gold Mines are currently encountering disruptions in their production, 'particularly in Latin America which has been hit very hard by the virus (Brazil, Chili, Peru), and on the other hand, we have got an awful lot of new money printing going on in the world with expectations for high inflation in some areas', observed John Meyer. In this condition, as the demand for gold remains strong and the offer is weakened, gold price will likely to keep increasing within the next few weeks.
What is the gold price forecast for the end of the year and beyond ?
A bandwagon of observers have also made bullish price forecasts in the long term, as concerns of recession, coronavirus uncertainties, the huge expansion of central bank liquidity and the explosion of government debt will continue to boost gold’s attraction as a safe haven asset.
Citi analysts have raised their projections on gold. Their three-month gold price forecast increased to $1825 per ounce, against a $1715 prediction for the second half of 2020 at the end of May.
The bank is expecting gold price to break above $2000 in 2021, whereas historical gold’s record price is $1921 reached in September 2011.
Goldman Sachs shares the same bullish stance, expecting the precious metal to reach $2000 an ounce in the medium term.
Earlier this month, Dan Popescu, investment research consultant and gold and silver analyst, said to IG TV he believes that in the next five years gold price could break above $5000.
How to trade commodities with IG
Looking to trade the gold and other commodities? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs and spread bets in a few easy steps:
- Create an IG trading account or log in to your existing account
- Enter ‘Spot Gold’ in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
React to volatility on commodity markets
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
1In the case of all DFBs, there is a fixed expiry at some point in the future.
See opportunity on a commodity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a commodity?
Don’t miss your chance. Upgrade to a live account to take advantage.
- Analyse and deal seamlessly on fast, intuitive charts
- Get spreads from just 0.3 points on Spot Gold
- See and react to breaking news in-platform
See opportunity on a commodity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
