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There is no definitive method of forecasting the future price of gold. From a historical standpoint, the precious metal has performed well under a myriad of conditions. Currently, gold is hovering at $1,542.20 US an ounce. In this article, industry experts weigh in on the gold price forecast for 2020.
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Average Price Of $1,800 With A High Of $2,000
“My prediction for 2019 is an average price of $1,800 with a high of $2,000 per ounce.
The reason for this prediction is quite simple. The tried and tested method when there is a financial correction is to switch from equities to bonds. But with bonds having such a low yield I think that many people will also consider other markets – including gold. A recession/correction is due and even though I’m sure everything that can be done will be done, to soften the blow, I feel that a wholesale move into bonds is not as compelling as it once was.
As the gold market is so small compared to the bond market, even a very small movement into this sector could have a profound impact on the price – which is why I see such good potential.
Also, bear in mind that one of the main reasons often stated for not holding gold is – it does not yield anything. But now many bonds don’t either. This, in my view, significantly weakens the argument for not having any physical gold or silver your portfolio. I’m not suggesting people jump in with both feet, but just a small allocation makes sense to me. I personally feel that a minimum allocation of 1% gold and 1% silver could be a useful starting point. If people want to speculate a little they can always consider some mining shares as well. It really depends on their appetite for risk.”
Simon Popple, Brookville Capital
$2,000 By 2020
“Tavaga portfolio allocation has Gold as an important ingredient for asset allocation. Volatility has increased again recently amidst global geo-political tensions and central banks hoarding gold. We expect gold will touch $2,000 by 2020.”
Nitin Mathur, CEO, Tavaga
I Don't Think There Has Been Any Better Time To Own Physical Gold
“Accurately predicting the future price of gold is on the same level of mastering alchemy – in my opinion – many have tried and as far as we know, no one has been successful. However, there are plenty of ways to gauge potential swings and trends, borrowing any major geopolitical blowup (literal or metaphorical), unforeseen economic turn, etc. With that said, based on how the US and global economies are fairing and future market indicators (i.e. recent 3/10 year bond inverted yield curve, central banks physical gold buying trends, mining yields, etc.) combined with the fact that no nation in the history of nations has survived debt levels the US and other nations have achieved with our fiat currencies.
I feel I am safe, and being conservative in saying that gold should be trading between $3000 – $5000 per ounce in ten years. Should the US dollar fail and/or the US dollar loses the coveted global reserve currency status and/or even the loss of the petrodollar, gold could hit these level far sooner. It's a troubling time for the dollar that is only going to get worse – I don't think there has been any better time to own physical gold, if for no other reason than for financial insurance.”
Brian Whitfield, President/CEO, Pacific Coin Exchange (PCE)
At Least $1,600 In 2020
“I invested heavily into gold and gold miners in late 2018 within my public portfolio, after not investing in the space for seven years, because a number of factors are converging to push the price of gold higher over the next 5 years or more.
My conservative baseline case is for gold to reach at least $1,600 in 2020. If the United States economy continues to slow, and if the Federal Reserve reduces interest rates, I expect to see gold above $1,800, with considerable upside potential above that level. The downside risk is limited, because even if the economy regains momentum, gold is unlikely to break below its massive $1,350 support level that was built over the past 6 years. If I see gold dip below $1,400, I would be a major buyer.
Gold benefits strongly from low real interest rates. Gold prices have a strong historical inverse correlation with inflation-adjusted Treasury bonds and similar assets. As bond yields have gone negative around the developed world, and as the U.S. Federal Reserve has started a cutting cycle with low rates, gold is becoming more attractive. The historical argument against gold is that it produces no yield and merely maintains its long-term purchasing power. However, if bank accounts and bonds around the world produce no income and offer negative inflation-adjusted yields, the opportunity cost for holding a safe asset like gold, with no counter party risk, becomes much more attractive. And because gold is such a small allocation of global portfolios, even a small uptick in investor interest to hold the metal can massively boost prices.”
Lyn Alden, Founder, Lyn Alden Investment Strategy
Bullish Gold Projection
“There are multiple simultaneous geopolitical flashpoints which I project will push gold prices to the $1800-$1900/oz. range by the end of 2019. Below are the flashpoints each one on their own would put intense upward pressure on gold prices:
US-China trade negotiations which are running hot and cold adding volatility to the global markets. The political stakes and positions will harden for Xi and Trump. For Xi it’s the violent demonstrations in Hong Kong, which could prompt military intervention. For Trump it’s the forthcoming presidential elections in 2020 and pressure to keep the US economy in good shape in order to have a good chance at reelection.
Hong Kong: The unrelenting and intense Hong Kong demonstrations requesting greater autonomy beyond the 1997 agreement which could instigate military intervention by China.
Persian Gulf: Simmering tit-for-tat tensions with oil tanker vessels in the Persian Gulf between Iranian and western countries that could spiral out of control with an ill-fated miscommunication or decision. About 30% of the world’s petroleum needs pass through the Strait of Hormuz and any interruption would present a dilemma.
Global Debt: The growing record-breaking level of global debt exacerbated by shadow banking whose purpose is to legally circumvent regulatory requirements. For this reason, financial institutions and sovereign countries have no idea the value of shadow banking debt – essentially a black financial hole – and would be unable to assess neither the amount nor level of risk during an economic slowdown.
Kashmir: The recent annexation of Kashmir by India could provoke Pakistan to initiate an aggressive posture that may result in a military conflict between two nuclear-armed countries.”
Albert Goldson, Executive Director, Indo-Brazilian Associates LLC
The general consensus appears to be that there is no better time than now to invest in gold. There are advantages and disadvantages to any investment, yet gold is a good choice as a diversification strategy. Take into account the expert insight provided in this article, and always remember to do your due diligence before investing.