The gold price has recently experienced a – comparatively – slight correction, but is currently holding above the $3,300 per ounce mark again. While this is still a significant pullback from the high of $3,500, analysts believe that the gold price rally is far from over.
Even at the current level, and after the strong increase of the past 12 months, the VanEck Gold and Precious Metals Fund still sees real value in the yellow metal. The fund managers assume that Gold is currently working on forming a new, solid base at $3,300 per ounce and view the recent pullback as neither surprising nor cause for concern.
Moreover, the analysts continue, the broader capital market still largely ignores the precious metal, despite the gold price having risen by 27% in 2024 and already gained 25.5% this year! While investment demand has increased significantly in recent months, only about 1% of globally managed assets are currently allocated to the gold sector.
Gold Price Increase of $600 Possible
Despite the recent rise, the demand for gold as an investment is still clearly below previous highs, it was further stated. However, should investors again invest in the yellow metal to a significant extent (and according to VanEck, there are increasingly better reasons for this), the interplay of the resulting capital inflows and the ongoing purchases by central banks could cause the gold price to rise considerably.
Based on the historical relationship between ETF holdings and the gold price, a return to the high of ETF holdings from 2020 could lead to a gold price increase of $600 per ounce. Overall, the experts believe, the gold price could rise to $4,000 per ounce this year.
Good Position for the Continuation of the Gold Price Rally
According to VanEck, the precious metal is in a good position to continue its rally, especially if more investors from the West should return to the market. The ongoing uncertainty about US trade policy, along with persistent inflationary pressure and geopolitical risks, should further increase the attractiveness of gold as a safe haven and hedge against market volatility, the analysts believe.
However, investors should not view the yellow metal solely as a short-term speculation. They see potential for the gold price to reach the $5,000 per ounce mark in the coming five years. VanEck points out that gold has performed better in the long term, over the past 20 years, than other traditional asset classes.
