To estimate the potential of gold in the coming years, we need to understand the direction in which the XAU/USD will move once the triangle is completed. Analysis of the price history of several instruments under similar conditions points to a more likely bullish breakout. Once the upper edge of the triangle is broken, the target price will be located on the boundaries of the second global area, between 1950 and 2000 USD. Then, a small pullback may occur, but if the buyer is strong enough, the price may exceed the boundaries between areas 1 and 2, reach the previous all-time high of 2074 USD, and even update it.
The next target will then be the level of 2,350 US dollars. Analysts at the US investment bank Goldman Sachs forecast a sharp rise in the price of gold this year. At the end of March, they predicted an increase to 2,300 U.S. dollars per troy ounce over a three-month horizon and even a price of 2,500 U.S.
dollars over a six- and 12-month horizon. Investing in gold has never had a better time to start than right now, the price is about to skyrocket, but participating in the trading of such a product can be difficult due to its physical nature and the exclusivity of many gold brokers, who are not as open to new traders. Gold is not only known for being a factor that diversifies portfolios, but because inflation fears are increasing, investors tend to turn to gold because it is considered a good hedge against rising prices. Demand for the price of gold is key, since investment demand plays a much more important role in the evolution of the price of gold than demand for jewelry, since the former is much more dynamic.
Therefore, if the exchange rate of one of the currencies (for example, the dollar) depreciates in relation to the other reserve currencies, while preserving the purchasing power of buying gold in other currencies, the logical consequence is the increase in the price of gold relative to the depreciated currency. For example, India consumes between 800 and 850 tons of gold annually, and rural India accounts for 60 percent of the country's gold consumption. According to Widmer, there is a strong correlation between central bank purchases of gold and rising gold prices. In the same way, gold and interest rates also contribute to moving the price of gold, since lower interest rates, which usually occur when there are times of financial uncertainty and governments want people to spend, mean that saving is more difficult.
In addition to the above-mentioned ways of investing in gold, an investor may consider buying shares in gold mining companies such as Barrick Gold Corp. In addition, the fact that gold is a scarce asset, but with an uncertain supply, means that it is often worth watching the markets and forecasting gold prices for the next 10 years can often bring positive gains over this long period of time. 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 dollars of inflation will have to be paid per ounce.
In an interview with Focus magazine, Eugen Weinberg, a gold price expert at Commerzbank, expects a gold price of 1,300 USD by the end of the year. According to the analyst, central bank monetary policy, inflation, risk differentials, current economic developments and reactions to political risks are generally essential for the evolution of the price of gold, since gold has the status of a safe haven in crises. This was known as the gold standard, but in 1971, the President of the United States, Richard Nixon, told the Federal Reserve to stop respecting the value of the dollar in gold and ended its primary use as a currency value and helped the asset become more of a store of value. Peter Fertig, from QCR Quantitative Commodity Research Ltd, in Hainburg, which forecasts a gold price of between 1,150 and 1,375 US dollars, believes that the main risks to the price of gold are a strong US economy and a low US unemployment rate.
. Other factors that explain the rise in the price of gold could be the recovery in demand for gold in emerging markets such as China and India, as well as expectations of a weaker dollar. .