The gold price could rise to $2,000 according to analysts

A number of analysts believe that the price of gold could soar 30%+.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The gold price has shot up over the last year and as a result, investors are excited about the precious metal again. According to new data from the World Gold Council, global gold-backed exchange-traded funds (ETFs) hit record assets under management in September.

Can the gold price keep rising? Some City analysts certainly believe it can. Here’s a look at some recent gold price forecasts.

Could gold hit $2,000?

Citigroup Senior Commodities Strategist Aakash Doshi is one analyst that is bullish on the yellow metal. He thinks gold could hit $2,000 an ounce “at some point in the next year or two” – a rise of around 34% from the current price.

Doshi recently said that positive drivers for the gold price include lower-for-longer nominal and real interest rates, escalating global recession risks exacerbated by US-China trade tensions, heightened geopolitical rifts, rich equity and credit market valuations, and strong central bank and investor buying activity.

Interestingly, Doshi is not the only analyst to forecast a price of $2,000 or more for gold, as the table below shows.

Company Price target Timeframe
Bank of America/Merrill Lynch $2,300 Unspecified
TD Securities $2,000 Several years
Citigroup $2,000 Within two years
Independent Strategy $2,000 Next year

Clearly, a number of analysts believe that there is considerable upside to the price of gold.

Worth investing?

Should you buy gold for your investment portfolio on the back of these bullish forecasts?

Well, the answer to that question depends on both your financial goals and what you expect to happen to the global economy and stock markets in the years ahead.

Personally, as I recently outlined here, I think that having a little bit of exposure to gold could be sensible as a form of portfolio insurance. Investing in gold can be an effective way to diversify your portfolio because its price movements tend to be uncorrelated to the movements of other assets such as equities and bonds. So, if global stock markets were to decline, gold could provide some protection.

That said, I wouldn’t want to hold much more than around 5% of my total portfolio in gold. The main reason I say this is that gold doesn’t pay out any income, which means that it doesn’t enable you to compound your earnings over time (the key to building wealth). To profit from gold, you need its price to rise. And there’s no guarantee that this will happen.

Better investment strategy

In my view, stocks remain a far better long-term investment than gold.

With stocks, you can build a portfolio that pays you a regular income (through dividends) meaning you can compound your wealth over time by reinvesting your income. You can also potentially live off this dividend income in retirement without having to worry about selling a proportion of your portfolio. In addition, stocks have a brilliant track record over the long run – since 1899, the UK stock market has returned around 5% per year above inflation.

As part of a diversified portfolio, gold could definitely be worth considering. Yet when it comes to core investments for your portfolio, stocks are a better idea in my opinion.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

How much would I need to invest in income shares to earn £300 a month?

What kind of lump sum would be required to earn £300 a month by taking advantage of some of the…

Read more »

Investing For Beginners

Up 31% in a month, could this FTSE 250 stock be getting bought out?

Jon Smith takes a look at speculation that's pushing the share price of a FTSE 250 share higher and considers…

Read more »

Investing Articles

Here’s how I’d follow Warren Buffett to start building passive income in 2025

Ben McPoland highlights one FTSE 250 firm with a strong competitive edge that he thinks can continue rewarding investors with…

Read more »

Investing Articles

Burberry shares: undervalued FTSE gems that are ready to rocket?

Burberry shares soared at the beginning of the week as the takeover rumour mill went into overdrive. Is Paul Summers…

Read more »

US Stock

Here are the latest share price forecasts for S&P 500 giant Amazon

Amazon has generated monster gains for investors over the last decade. And Wall Street analysts believe the S&P 500 stock…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

2 high-yield FTSE 250 shares I’d buy today — and 1 that I’d avoid

UK markets have felt some volatility after last week’s Budget and the FTSE 250 was no stranger to it. Our…

Read more »

Investing Articles

3 reasons the Rolls-Royce share price could soar over the next decade

Sustainable aviation fuel, narrow-body aircraft, and small nuclear reactors could all keep the Rolls-Royce share price climbing over the next…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Here’s how much income I’d get if I invested my entire £20k ISA in cheap BT shares

BT shares are on the up but still cheap, while the FTSE 100 telecoms stock offers a good yield too.…

Read more »