Despite a series of forecasts that gold prices will continue to rise sharply, investors are advised to be cautious in the face of overly optimistic expectations.
The long-term outlook for the precious metal is still positive, but price movements in the coming time will depend on the macroeconomic environment, monetary policy of major central banks and demand from the formal sector. This is the assessment of analyst Peter Reagan, cited by Zolotoy Zapas portal.
According to experts, recently the market has increasingly seen many forecasts that gold prices may increase to 6,000–10,000 USD/ounce. Although this possibility cannot be completely ruled out in the long term, for these prices to become reality, many supporting factors will have to appear simultaneously – which is not guaranteed.
Peter Reagan noted that the psychology of constantly raising price targets every time gold conquers a new milestone may make investors chase profits instead of building a well-founded investment plan.
If gold reaches 5,000 USD, some people will immediately wait for 6,000 USD. If the price goes up to 6,000 USD, they will start expecting 8,000 USD. That is not planning, but chasing after profits," the expert wrote.
According to Peter Reagan, a more realistic scenario is that gold prices will gradually increase, along with a structural increase in demand for defensive assets.
Gold continues to receive support from large-scale purchases by central banks, geopolitical tensions and the need to diversify investment portfolios.
However, experts warn that the gold market cannot avoid periods of correction.
High interest rates in the US, strong USD and rising US government bond yields are still factors that can curb gold prices. These factors reduce the attractiveness of precious metals because gold does not generate interest income.
*Note: The prices of 6,000–10,000 USD/ounce mentioned in the article are forecasts that are appearing in the market, not the target price given by expert Peter Reagan. The expert emphasized that investors need to be cautious with overly optimistic expectations.
