The gold outlook has seen its ups and downs over the past five years.
Ounces of gold have traded within a broad range of about $1,050 to $1,350 during that time, sometimes buffeted by economic changes and risk factors like monetary policy, and at other times buoyed by by safe haven demand and investment interest.
For those interested in gold as a financial investment — from physical gold to gold stocks to gold exchange-traded funds — it’s worth taking a retrospective look at the gold outlook. From price trends to supply and demand, there are many important factors to consider before jumping into the market.
Scroll on to read what analysts and executives at gold mining companies predicted for the gold price and gold market from 2015 to the present, as well as what the future actually brought for the yellow metal.
Gold outlook 2019 — Market waits for Fed to blink
Starting price: US$1,280.40
2019 analyst gold price forecast — The Fed was one of the leading indicators for gold market watchers at the beginning of 2019, with many predicting that the central bank would halt or rein in interest rate hikes for the year. Analysts also pointed to the US dollar’s performance, saying a slip could bring back demand for precious metals as a safe haven.
2019 CEO gold price forecast — As a whole execs in the gold mining space expected 2018 to be stronger than it was. As 2019 came to a start, they were calling for improvements in the market and gold price; they anticipated that investors would diversify into gold and set aside trading and investment in hot sectors like cannabis, cryptocurrencies and lithium.
Q1 2019 — The year kicked off with the Fed announcing plans to pause its monetary tightening cycle, a move that brought renewed demand for gold among investors. However, despite this news on rate hikes the gold price rose only 0.85 percent for the quarter and struggled to stay above US$1,300, with mining analysts saying that its market performance was muted by the still-strong US dollar.
Gold outlook 2018 — Fed hikes, US dollar weigh on gold
Starting price: US$1,302.50; ending price: US$1,280.40; percentage move: -1.4 percent
2018 analyst gold price forecast — Heading into 2018, experts were advising investors to watch the Fed and geopolitics for clues on gold price movement. The expectation was for at least three rate hikes from the central bank, and after geopolitical tensions supported the yellow metal in 2017 market watchers were anticipating further impact during the year.
2018 CEO gold price forecast — For their part, gold mining execs were generally positive on the price of gold at the start of the year, calling for a strong year for the metal and decreased interest in competing sectors such as cannabis and cryptocurrencies. They hoped to see more liquidity for junior stocks.
Q1 2018 — Gold prices moved between about US$1,300 and US$1,350 during Q1 2018. While the metal suffered ahead of the Fed’s first rate hike of the year it ended the period up around 3 percent.
Q2 2018 — After gaining in Q1, the gold ounce price dropped 6 percent in the second quarter, falling below the critical US$1,300 level. The Fed hiked rates for a second time, putting pressure on precious metals and the gold market, while investors shied away from the yellow metal, afraid that the developing trade war between the US and China would dampen the economies of both countries. Gold’s lowest point for the period was US$1,247.10 on June 28 and its highest was US$1,352.80 on April 11.
Q3 2018 — Q3 brought a drop of nearly 5 percent for gold prices. They sank below US$1,200 in mid-August, driven downward by a strong US dollar and a third rate hike from the Fed. The yellow metal traded between about US$1,175 and US$1,250.
Q4 2018 — The price of an ounce of gold picked up during the year’s last quarter, climbing almost 8 percent. Although the Fed hiked rates for a fourth time in December, drops in key US indices sent investors rushing back into assets like physical gold as a safe haven. Gold prices were only about $20 short of $1,300 by the end of the year.
Gold outlook 2018 expectations versus reality — Gold was down about 1.5 percent at the end of the fourth quarter, with the general consensus from industry insiders being that it could have done worse considering the headwinds it faced. Those included the Fed’s steady rate hikes (as predicted) and continued disinterest from investors due to a strong US dollar.
Geopolitics did move gold and other precious metals in 2018, but perhaps not as anticipated. Instead of generating price gains like worries about Donald Trump did in 2017, the trade war weighed heavily on the gold market.
Gold outlook 2017 — Trump uncertainty boosts gold
Starting price: US$1,150.90; ending price: US$1,302.50; percentage move: +14.59 percent
2017 analyst gold price forecast — 2016 brought uncertainty for gold, silver other precious metals, largely in the form of Brexit and the election of Trump as president of the US. When 2017 began, analysts were interested to see what those major changes would bring for the market — overall the consensus was that the price of gold would move higher, but with some ebb and flow.
2017 CEO gold price forecast — As 2017 began, execs in the gold mining space were also waiting to see how Trump might impact the price of an ounce of gold as well as prospects for gold stocks and gold producers. While in general their outlook for gold was positive, most pointed to the president as a wildcard with the potential to move gold both up and down.
Q1 2017 — Despite a rate hike from the Fed, the gold ounce price saw substantial growth in Q1, rising almost 9 percent on the back of uncertainty and concern about Trump. Its quarterly peak of US$1,257.64 came in mid-February about a month before the Fed made its monetary policy announcement.
Q2 2017 — Gold’s upward momentum came to a halt in Q2, with the metal losing 0.4 percent for the period. Though it neared the US$1,300 mark in early June, it did not push past it and soon began to sink after another Fed decision on rate hikes. While Trump and geopolitical issues like Brexit remained concerns, they were not enough to buoy more investment demand for precious metals like gold.
Q3 2017 — September was one of gold’s worst months of the year, but the metal still enjoyed growth over 3 percent in Q3. Tensions between the US and North Korea played a role in its uptick, but news that the Fed would raise interest rates one more time for the year dampened its gains. The highest gold ounce price of the period came on September 7, when it reached US$1,348.60 after weak US jobs data.
Q4 2017 — Q4 brought another gain of about 3 percent for the yellow metal, allowing ounces of gold to end the year priced just above US$1,300. Gold’s upward momentum came despite a third rate hike from the Fed. Jerome Powell was nominated for the Fed chair position by Trump during the period.
Gold outlook 2017 expectations versus reality — The price of an ounce of gold rose nearly 15 percent in 2017, with market uncertainty caused by Trump leading its gains and investment interest as expected.
Gold outlook 2016 — Gold jumps on Brexit, drops on Trump
Starting price: US$1,061; ending price: US$1,150.90; percentage move: +10.48 percent
2016 analyst gold price forecast — After a substantial price drop for ounces of gold in 2015, mining analysts were prepared for precious metals like gold to suffer another beatdown in 2016. US currency strength and economic growth were top risk concerns, and some major firms were calling for the metal to drop below the psychologically important level of US$1,000.
Even so, market watchers believed there was room for a future increase, with potential positive investment demand growth factors being deterioration in the global economy, equity market setbacks and a lack of rate hikes from the Fed.
2016 CEO gold price forecast — Despite the previous year’s lackluster performance, many gold mining execs were expecting a turnaround for the gold price outlook in 2016, with one commenting, “It would be difficult to see a worse market for gold.” Others in the mining industry pointed to a reduction in the number of gold companies (via delistings and M&A activity) as positive. US currency strength and economic growth were identified as possible risk factors.
Gold outlook 2016 expectations versus reality — Ounces of gold ended the year more than 10 percent higher, though the closing price was well under the July peak of US$1,365.40.
Brexit played a substantial role in moving investment demand growth for the yellow metal and other precious metals, with investors flocking to gold as Britain’s decision to leave the EU ratcheted up uncertainty and concerns about risk. By the fourth quarter, however, Trump’s election and a December rate increase from the Fed had sent gold down to around US$1,150.
Gold outlook 2015 — Strong US currency dampens gold
Starting price: US$1,189.80; ending price: US$1,061; percentage move: -11.27 percent
2015 analyst gold price forecast — At the start of 2015, experts in the mining space were calling for the gold price to put on a weak performance in the first half of the year due to rate hike expectations. They then saw growth for ounces of gold in the latter half of the year with the dissipation of that pressure. In general, the expectation was for 2015 to be quieter than 2014 and especially 2013, which was a particularly bad year.
Gold outlook 2015 expectations versus reality — While the outlook on the gold ounce price was fairly positive at the start of 2015, the yellow metal did not see growth and ended up falling over 10 percent. Although the Fed did raise rates as expected, that didn’t happen until December, which meant that the prospect of an increase weighed on investment demand for precious metals like gold throughout the year. Also weighing on gold costs was a strong US currency.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.