Most price forecasts aren’t worth more than an umbrella in a hurricane. There are so many factors, so many ever-changing variables, that even the experts usually miss the mark. Â
Further, some forecasters base their predictions on one issue. “Interest rates will rise so gold will fall.” That’s not even an accurate statement, let alone a sensible prediction (it’s the real rate that affects gold prices, as I’ll show below).
But there is value in considering predictions. It can solidify why one has invested, examine factors that may have been overlooked, or even cause one to revise their expectations.
So while we take predictions with a grain of salt, let’s look at what might be ahead for gold price in 2021 and the next 5 years. We’ll first summarize what many analysts are predicting, and then look at the factors that are likely to have the biggest impact on gold. I’ll conclude with the probable prices I see based on those factors, as well as some long-term projections.
This will be fun, so let’s jump in! | The Golden Crystal Ball | I’ve compiled gold price predictions from a number of banks and precious metals analysts. Â
The table below shows the gold price prediction from various consultancies and independent analysts. Not all gave a forecast for both time periods, but I’ve listed what they’ve stated publicly. Here’s what they think is ahead for gold. | | You can see that most analysts predict gold will exceed $2,000 per ounce in 2021. Two project it will average in the $1,900-range. And of those I found, all are very bullish long-term (though this survey is not exhaustive, as there are always analysts who are bearish). Â
A couple interesting points to highlight from these analysts…
CPM Group’s projection is lower than most, but if gold averages $1,922 in 2021, it would represent an 8.2% increase over 2020 and a record annual average. They also state that “we expect prices to rise sharply at some point in the future, to new records significantly higher than $2,000. Such an increase would be expected to be caused by investors buying increased volumes of gold in a future economic and political crisis… the period 2023 – 2025 is perhaps the most likely time period to expect such.” (Their outlook and projections can be viewed in more detail in their monthly Precious Metals Advisory on their website.)
Meanwhile, we’ll note that analyst Ross Norman has won first place in the LBMA gold price survey nine times. He predicts gold will rise 20% this year.
Last, the average 2021 gold price forecasts from these analysts is $2,228.
So what is my 2021 gold price prediction? To answer that question we have to look at the various factors that are likely to have the biggest impact on the price, both positive and negative.     | | |
