The yellow metal could be looking at nearing the $5,000 an ounce price tag in a decade and that is a conservative estimate, according to the annual In Gold We Trust Report published by Incrementum AG.
The 14th annual report made some pretty bold predictions for the gold market, forecasting prices too, at least, approach $5,000 an ounce and possibly even push towards $9,000 an ounce by 2030, Incrementum AG fund managers and authors of the report Ronald-Peter Stoeferle and Mark Valek wrote on Wednesday.
The difference between whether gold will be near $5,000 an ounce or $9,000 an ounce will depend on the global debt situation as well as inflation.
“The proprietary valuation model shows a gold price of USD 4,800 at the end of this decade, even with conservative calibration. Should money supply growth develop in a similar inflationary manner to that of the 1970s, a gold price of USD 8,900 is conceivable by 2030,” the report stated.
The monetary systems in their current form all have an expiration date, the authors of the report said. “Due to the expected economic and monetary turbulences, the coming years will hold many challenges for investors,” Stoeferle and Valek wrote.
In last year’s report, the authors pointed out that gold was in the early stages of a new bull market.
Gold’s trade action in 2019 confirmed this view as prices rose well above $1,300 an ounce and continued to rise to the current levels of around $1,700 an ounce. “Our gold price target of >USD 1,800 for January 2021 is within reach,” the report said.
“From the point of view of current market sentiment, seasonality, and the CoT report, we would not be surprised to see a several-week consolidation phase,” Stoeferle and Valek wrote.
Longer-term, the report sees new all-time highs for gold as just a matter of time. In dollar terms, that would mean gold breaching $1,920 an ounce level and on the inflation-adjusted basis, it would mean gold climbing above $2,215.
“The question is not whether the gold price in USD will reach a new all-time high, but how high this will be. The authors are convinced that gold will prove to be a profitable investment over the course of this decade and will provide stability and security in any portfolio,” the report said.
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