Gold Price Prediction: Major investors and industry veterans around the world believe that gold prices could reach new record highs in the next 24 months. According to the report of Financial Times, the central banks of the world have increased the purchase of gold. Along with this, rising concerns over government debt, tensions between countries and questions about the dominance of the US dollar continue to support demand for the precious metal. This prediction of a big jump in gold comes at a time when its prices have recently fallen slightly. Gold fell 2 percent to $4,075 a troy ounce on Wednesday. The decline comes amid expectations that the US Federal Reserve may once again raise interest rates. However, the international market and futures (MCX) market saw a modest recovery on the next day, Thursday.
Earlier in January, gold hit a record high of $5,500 per troy ounce, before falling. Despite this decline, gold prices have remained at historically high levels. According to the report, fund managers are optimistic that gold will rebound as investors seek safe havens amid growing uncertainty in economic and financial markets.
Why are wealthy households selling government bonds?
Peter Marrone, chairman and chief executive of mining company Allied Gold, told the news outlet that investors should consider whether markets around the world are headed for a major financial disruption. Peter Marron said that as economic uncertainty intensifies, family offices that manage the investments of wealthy families are increasingly turning to gold. Some of these investors are reducing their holdings in government bonds in favor of gold.
Similarly, Ian Cockerill, chief executive of gold producer Endeavor Mining, also cited concerns about paper currencies, economic instability and efforts by central banks to protect the value of their treasuries as reasons to support gold prices. Cockerill suggested that $4,000 per troy ounce could be close to the price level before the next possible bounce in gold. However, he also cautioned that this level is not certain to last forever.
Why trust gold more than paper notes?
Charlotte Yong, fund manager at Troy Asset Management, said at the Financial Times Precious Metals Symposium on Wednesday that gold could reach new record levels in 12 to 18 months. Yong sees gold as a hedge against the deteriorating financial condition of governments, particularly the rising debt of the US. He also pointed to the possibility that during future recessions, central banks could increase the money supply, thereby weakening public confidence in the currency. He said that gold cannot be created by increasing the money supply like paper currency. This is what makes gold attractive to investors looking to protect their wealth.
Many countries are keeping a distance from the US dollar
Paul Karn, delegated chief investment officer for Europe, Middle East and Africa at Aon Investments, also expects gold to reach new highs in two years. Paul Carney cited US policies and the use of the dollar as a geopolitical weapon as reasons that could prompt other countries to seek alternatives to the US currency. He said gold could benefit if governments and financial institutions became less willing to rely on the dollar.
China has also filled its coffers with big banks
Central banks remain an important source of demand for gold, with emerging market institutions seeking to diversify their reserves away from the US dollar. Gold purchases by central banks in September reached the highest monthly level since November 2024, according to preliminary data from the World Gold Council. So far the purchase of about 63 tonnes is seen. The figures are compiled using data from the Central Bank and the International Monetary Fund.
China has also continued to increase its gold reserves in recent months. According to World Gold Council data provided by the Financial Times, the People’s Bank of China has gold reserves of about 2,410 tonnes, about 9 percent of its total reserves.
