Commodities

Gold Price Forecast for 2024, 2025, 2030 and Beyond

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Written By: Faith Maina
Reviewed By: Michael Abadha
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Gold price (XAU/USD) broke multiple records between March and May 2024, going on to register all-time highs of $2,450 per ounce on May 20 at the spot market. However, the commodity then declined steeply as the geopolitical risk reduced in the Middle East and FOMC minutes all but dashed prospects of an interest rate cut in June.

That said, gold prices were up by 0.95 percent as of this writing to trade at $2,355 per ounce in the spot market, as it made an attempt to return to the upside. The latest upsurge is driven by the rising stakes in the Middle East as Israel’s offensive in Rafah gets more intense. The latest news reports indicate that 45 Palestinians lost their lives, and scores more were injured in Israeli airstrikes in the area. The safe haven demand for the precious metal bubbles under as the Israel-Hamas war takes a new dimension.

The yellow metal’s uptrend in 2024 started in earnest in mid-February, as the market became increasingly convinced of Fed rate cuts in June 2024. Gold rose on 25th and 26th April, as the market speculated the likelihood that the BoJ would be selling US dollars to ease pressure on the yen.  However, the cooling of war rhetoric between Israel and Iran brought prices down as safe-haven demand reduced. In the last week of May, however, the geopolitical risk in the Middle East has risen significantly, as Israel intensifies its attacks on the densely populated Rafah City in the Gaza strip.

XAU/USD gets tailwinds from weak dollar fundamentals

The US dollar has eased down in May as a series of soft macroeconomic data weighed in. First, the US GDP growth figure for the first quarter came in at 1.6 percent, lower than the forecast figure of 2.4 percent. Next, the Nonfarm payroll jobs data showed that 175,000 nonfarm jobs were created in April, the fewest in six months. In addition, the February and March figures were revised downwards by a combined 22,000. The latest jobs market data showed that the number of Initial Jobless Claims filings rose to 231,000 in the week ending May 9, exceeding the forecast figure of 212,000. Furthermore, the rate of unemployment in the US rose to 3.9 percent from 3.8 percent.

In the wake of these figures, the dollar has weakened against major world currencies. The DXY index, which weighs the greenback against a composite of six other currencies, has slid to hover around 104.75 as of this writing, after spending a substantial time above 106.00 in April.

Falling Treasury yields a source of tailwinds for gold price

US Treasuries are substitutes for gold as far as safe-haven investments go, and falling rates on these assets have tilted the scales in favour of the yellow metal. As of this writing, yields on the benchmark 10-year bonds have fallen below 4.470%. This will likely supply upward propulsion on the XAUUSD trading pair in the near-to-middle term.

Please note that the original article was published in September 2022. However, we update it regularly to incorporate all the latest information. You are also welcome to join my free Telegram group for up-to-date analysis on Gold & Bitcoin.

Gold news

The US dollar sits precariously after the US economy released a series of weak data in recent weeks. A rise in the unemployment rate, a decline in NFP jobs and a higher-than-expected initial jobless claims filings underline the rising pressure on the US dollar and support for gold’s upside. That said, gold could come under pressure from the US dollar after the US economy reported better-than-expected results in the week ending May 24. Durable Goods Orders reading came in at 0.7 percent in April, beating the forecast contraction of minus 0.9 percent.

Meanwhile, Initial Jobs Claims figures declined to 215,000 in the week ending May 16, lower than the forecast 220,000. The figures snapped a two-week rising streak, bringing reprieve into a US economy whose jobs figures showed a rise in the unemployment rate to 3.9 percent in April. Also, the S&P US Manufacturing PMI came in at 50.9 in May, beating the forecast 50.0. Furthermore, the services PMI grew to 54.8 from April’s 51.3, and also exceeded the consensus forecast 51.2

In addition, record high prices triggered reduced gold purchases in April, with the  effects spilling over into May. In particular, there was a decline of 136 tons in April, equivalent to a reduction of 30 percent, and the highest monthly decline since the year began.

The Federal Reserve retained interest rates in the range of 5.25%- 5.50% rate in its May 1 decision, and that rate is expected to remain in place in the near term. However, a continuation of weak US macroeconomic data printouts raises the prospects of rate cuts in H2 of 2024. Many investors will, therefore, likely increase their purchases of gold in the intervening period, thereby providing further boost to gold price.

Elsewhere, China announced a CNY 344 billion investment fund to boost the country’s semiconductor industry. This is expected to stimulate economic growth in the world’s second-largest economy, and provider propulsion for gold prices. The country’s central bank increased its gold imports for the 18th straight month in April, adding 2 tons to its vault. Gold currently constitutes about 4.9 percent of China’s forex reserves, the highest ever on record.

China’s gold appetite is partly attributed to the dollar’s strength against major global currencies since the year began, with the yuan having lost about 1.5 percent of its value against the greenback during that period. Therefore, China’s central bank is using gold to diversify its foreign reserves and offset the pressure from the dollar.

Furthermore, there has been a notable increase in retail purchases of gold amid a troubled property market. These developments have combined to provide upside propulsion to gold prices and will likely continue to provide support in the mid-term.

XAU/USD And Its Correlation With The DXY Index

The dollar strength index tracks the strength of the USD against a basket of major global currencies. This index has recently broken its uptrend and is now gaining downward momentum. In the event the DXY index drops below 100 points, it is very hard to see Gold below a new ATH.

The gold price chart has been historically inversely correlated to the DXY index. However, the two largely followed the same upward trajectory since early March, with neither relenting. However, the US dollar emerged the stronger of the two in the second half of April, as safe haven demand for gold fell. The DXY has stayed above 105.00 since 11 April, signifying the underlying strong dollar demand.

DXY Chart

Gold Price Historical Chart

In August 2020, the gold price rallied to an all-time high of $2,072.85, surpassing the previous record high of $1,924.77 it hit nine years before. With the subsequent decline, the psychologically crucial zone of $2,000 has remained evasive. However, it has remained above $1,600 since rising above it at the peak of the coronavirus pandemic in April 2020.

Gold price crashed to $1,616 on September 28, 2022. This price was about 21.88% from its highest point in 2022. This crash coincided with a period when the Federal Reserve was hiking interest rates aggressively in a bid to fight soaring inflation. It then started rising after signs emerged that inflation was starting to ease in the US.

Bullion has performed really well this year. The precious metal soared by more than 8% since mid-February 2024, but the RSI currently signals that it is overbought. This could slow down gains in the near term, but does not rule out new gold price all-time-highs.

XAU/USD Historical Chart

Gold Price Forecast & Latest Analysis Analysis

I accurately predicted that gold would hover around past the $2,300 mark in my previous forecasts.

As the price now seems to have gained strength above $2300, the path of least resistance will likely be $2,394.6, and a break above that mark will signal bullishness. Furthermore, the commodity is likely to pivot at $2,348.40, with support at 2,284.78. A break below that mark could signal bearishness. Safe haven buying is likely to be the biggest contributor to the bullish outlook, as geopolitical risk rises in the Middle East, but better-than-expected US economic data could limit the upside for gold.

XAU/USD Latest Technical Analysis

I’ll keep posting my updated outlook on Gold and other assets in my free Telegram group, which you’re welcome to join.

Gold Price Forecast 2025 

The gold price forecast 2025 is largely an extrapolation of the influential factors in the current year. At the beginning of the year, Goldman Sachs indicated that the commodities bull market observed in the past year will likely continue into the current year and beyond. Indeed, the investment bank holds that the commodities supercycle will last for about 10 years.

The precious metal may reach new all-time highs above $2,200 an ounce based on this narrative. In addition, aIn addition, a tighter Fed policy and subsequent decline in economic growth will likely boost its performance as a risk-on asset.

However, even with the bullish gold price forecast 2025, competition from Bitcoin as a store of value may limit its upward potential.   

Gold Price Forecast 2030

A feasible gold price forecast 2030 is founded on US dollar movements due to the existing inverse correlation. In the event of geopolitical tensions, gold may find some support in its status as a safe haven. However, its upward momentum may be limited by a rise in the demand for the greenback.   

Over the past eight years, gold price has risen by about 60%. However, an assumption that the bull market will continue over the next eight years makes a surge of 50% viable. In that case, the gold price forecast for 2030 will be for the precious metal to hit a high of about $2,700 an ounce.

How to invest in gold

One of the viable ways to invest in gold is by buying bullion. It may be in coins or bars, certified with purity and weight have. Then, one can purchase or sell the physical gold to a reputable dealer. However, security reasons often lead some investors to embrace the route of futures and options.

Best gold stocks to invest in

One of the best ways to invest in gold is through stocks. In the past few years, mergers and acquisitions in the sector has led to a significant consolidation in the sector. Today, only a few large companies dominate the industry.

Barrick Gold, a company valued at $30 billion, is one of the best gold stocks to invest in. Its stock has dropped by about 7.95%. The other excellent stock to buy is Wheaton Precious Metals, which is worth over $17 billion. Unlike other gold companies, Wheaton does not do the real mining. Instead, the company has purchased rights for key gold assets.

The other best gold stocks to invest in are Franco-Nevada, Newmont Corporation, and Agnico Eagle mine. The chart below shows the performance of some of the biggest gold stocks in the industry.

Gold stocks chart

Gold futures

Futures are a contract in which one agrees to buy or sell the financial asset at the agreed-upon price before the expiry of the contract. For options, the investor has a chance and not an obligation to buy or sell the underlying instrument for as long as the contract is valid. To invest in gold via futures and options, one needs an account with a reputable financial broker. It is possible to trade in gold for a commission through the brokerage account.

Gold ETFs

ETFs and mutual funds are yet another viable way to invest in gold. A share of this financial instrument represents a specific amount of gold. One needs a brokerage account to trade in gold ETFs or mutual funds, like in futures and options.

In addition to the aforementioned ways of investing in gold, an investor can consider buying stocks of gold mining companies like Barrick Gold Corp. (GOLD) or Newmont Corp. (NEM). While the share price is usually correlated to gold price, the firm’s fundamentals are also influential.

The chart below shows two of the most popular gold ETFs, the iShares Gold Trust and SPDR Gold Trust. As you can see, these ETF tend to move in sync with gold prices.

Gold ETF SPDR Gold Chart

Summary

As was the case in 2021, gold’s relation with inflation has mixed. In 2024, the trend will likely continue as inflationary pressures continue to boost the precious metal. In addition, geopolitical tension in the Middle East and the Russia-Ukraine war will continue providing safe haven tailwinds. Nonetheless, an environment of higher interest rates may curb its upward potential.

This post was last modified on May 27, 2024, 16:17 BST 16:17

Written By: Faith Maina
Reviewed By: Michael Abadha

Faith Maina is a financial analyst and economist. She holds a Bachelor’s Degree in Economics and is underway in her Master’s degree course. She has an expansive understanding of global markets and their drivers. Her specialities are currencies, crypto, commodities, and equities. She lives in Nairobi, Kenya with her husband and son.

Published by
Written By: Faith Maina
Reviewed By: Michael Abadha