Summary
When global economic conditions become unpredictable, investors often flock to gold. The yellow metal is currently trading around $2,000 per ounce, up 12% for the year; over the past five years, the range for gold prices has been $1,275-$2,075. During the first phase of the pandemic, the spot price for an ounce of gold jumped 33% in six months and broke through the $2,000 level. Gold spot prices also spiked above $2,000 in early March 2022 due to the war in Ukraine, and are now at similarly high levels as tension builds in the Middle East. The current price of gold reflects the perceived safety of hard assets amid the global conflicts, as well as lower U.S. interest rates that tend to weaken the dollar, which is how the currency is priced. The outlook for Federal Reserve rate cuts also helps gold, as lower rates lower the risk for a global economic recession and thus a potential decline in gold purchased for jewelry. By our reckoning, gold prices have averaged $1,950 for 2023, above our forecast for $1,850. Our forecast trading range for gold in 2024 is $2,200-$1,700, and our average forecast for the year is now $2,000. This compares to average gold prices of $1,806 in 2021, $1,781 in 2020, $1,400 in 2019, $1,265 in 2018, $1,277 in 2017, $1,258 in 2016, and $1,155 in 2015. In conclusion, as long as geopolitics and global economic uncertainty are part of the market conversation, the price of gold is likely to remain at levels well above the historical average.
Subscribe to Yahoo Finance Plus Essential for full access
Exclusive reports, detailed company profiles, and best-in-class trade insights to take your portfolio to the next level
Source: finance.yahoo.com