To estimate the potential of gold in the coming years, we need to understand the direction in which XAUUSD will go when completing the triangle. Analysis of the price history of several instruments under similar conditions points to a more likely breakout on the upside. Once the upper border of the triangle is broken, the target price will be located at the boundaries of the second global area, around 1950 - 2000 USD. Next, there may be a small pullback, but if the buyer is strong enough, the price can push the boundaries between areas 1 and 2, reach the previous all-time high at $2074, and even update it.
The next target will then be the level of 2350 US dollars. The gold price forecast for 2025 is largely an extrapolation of the influential factors of the current year. Earlier this year, Goldman Sachs indicated that the bullish commodity market observed last year is likely to continue during the current year and beyond. In fact, the investment bank argues that the commodity supercycle will last about 10 years.
Real gold prices have significantly deviated from the world bank's predicted price, raising concerns about the reliability of the world bank's long-term gold price forecast. Gold investors cannot use these price forecasts as an indication to sell gold from their portfolios. Coronavirus relief packages and periods of economic recovery led to a decline in the price of gold, while rising inflation, the spread of the pandemic and geopolitical tensions made investments in gold much more attractive. Jewelry and industrial demand: Demand for gold from jewelry manufacturers and other companies that use gold in their products may affect the price of metal.
When US government bond yields rise, gold is likely to trend sideways or even downwards, while declining yields tend to cause very positive movements in gold prices. As a gold investor does not receive any cash flow during the holding period, it is impossible to value gold using conventional valuation methods. A reduced supply due to government restrictions on mining will make gold even more precious and may increase the price of gold. Although the United States has abandoned the gold standard, most central banks accumulate gold reserves.
Gold has proven to be an excellent long-term investment, and gold prices have increased sixfold since 2000. A multiple of the gold price to PE ratio of S%26P 500 can be used to assess the valuation attractiveness of gold. The low interest rate environment is good for gold prices due to the lower opportunity cost of holding gold. Gold production: Although the supply of gold never decreases, an increase in production can also significantly affect the price of the precious metal.
The yield of gold in Indian rupees is significantly higher than the yield of gold price appreciation. If the cost of mining is reduced, it will be feasible to operate more gold mining projects, leading to an increased supply of gold. Most novice gold investors believe that if inflation increases in the U.S. In the US, the price of gold should also rise, as more inflation dollars will have to be paid per ounce.
A gold investor in India has two sources of profitability, the price return on gold appreciation and the currency's return on the depreciation of Indian rupees.