Gold Price Predictions: How High Can Inflation Fears Push the Yellow Metal?

Gold and inflation have historically had a fairly one-dimensional relationship: If you think inflation is imminent, best bolster your portfolio with the inflation-resistant yellow metal. And vice versa. That could mean anything from buying the commodity outright, or investing in a fund that already has. Gold prices are changing, but should that affect your portfolio?

A photo of a gold nugget on a table, being picked up by tweezers, with more gold behind it.
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The recent consumer price index (CPI) report shows a historic rise in prices, which has important implications for bullion. Long-time gold price predictions seem to have come to fruition as gold broke out of a 15-month down trend to hit a nearly five-month high of $1,8599.99 an ounce. Gold is up nearly 14% on the day according to MONEX live gold price tracking.

If you recall, gold slumped dramatically in August. Indeed, gold dropped below $1,700 an ounce as investors panicked over the possibility of a sooner-than-later Federal Reserve tightening.

The question remains: Is gold still, well, the gold standard in inflation-hedging? Let’s see what some experts have to say on the matter.

Gold Price Predictions: Where Is the Commodity Going and When Will It Get There?

  • Citigroup’s Aakash Doshi expects gold’s rise will slow pending the Fed pushing ahead with the tapering timeline.
  • FxEmpire forecasts the possibility of gold hitting $1,900 but expects it to be largely a product of momentum, and could be a long ways away.
  • Kitco News still considers gold an especially cheap inflation hedge — especially compared to cryptocurrencies. But it warns any potential bling-buyers to watch out for a drop below $1,835 an ounce, which could indicate an end to the rally.
  • Brokerage company Zaner remains cautious on gold despite some admittedly positive markers: “The bias is up, but gold and silver have exhibited significant chop since the beginning of the year and reversing the downtrend has been difficult.”
  • Australian bank ANZ feels gold is quite stable at its current level. With low interest rates and expected inflationary pressure, ANZ believes gold should be able to hang around at its elevated price level.

On the date of publication, Shrey Dua did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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