CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Gold price prediction: Is US$4,000 by the end of 2021 within reach?

One analyst raised his gold price forecast to US$2,500 by the end of 2020, while another believes the asset is headed for US$4,000 in the 'next couple of years'.

Why is the Gold price rising?

Gold price is starting to trend higher again, after having begun the week on a lower note.

Gold contracts expiring in December 2020 are priced at US$1,995 each, based on the latest IG data on Tuesday 01 September 2020.

This represents an increase of around 1.7% since the previous day’s low of US$1,962.

Tuesday’s strong start also renews an uptrend that first began last Thursday 27 August, after the US Federal Reserve guided that interest rates will continue to stay down ‘for some time’, as part of a wider economic recovery plan.

This decision has allowed gold price to rally over 4%. Reversely, the US Dollar Index – directly related to Fed rates – has been languishing at a 2.5-year low, while the Volatility Index (VIX) is at its highest level since mid-July.

The safe-haven asset’s price increase also coincided with the US equity markets’ decline on Monday 31 August 2020. The S&P 500 and Dow Jones Industrial Average finished the day 0.22% and 0.78% lower respectively.

IG's market analysis shows that 79% of client accounts with open positions in this market expect the price to rise (net long), with the remaining 21% expecting the price to fall (net short).

Ready to buy or sell Gold?

Are you looking to trade Gold without having to buy and sell the actual asset? IG’s CFD feature allows you to do just that. Open a live or demo account with IG Bank today.

Gold price forecast: US$2,500 by the end of 2020?

In the immediate period, IG market strategist Pan Jingyi says gold prices will be ‘one to watch in the coming sessions with a breakout awaited here’.

‘On one hand, the weaker US dollar is positive for gold. On the other hand, we have firmer yields that threaten to weigh on the precious metal. Broadly, the weaker US dollar and the splatter of uncertainties ranging politics to geopolitics are expected to keep gold prices supported,’ she wrote.

However, any decline to sub-US$1900 levels could induce further selling, Pan added.

Looking further ahead, E.B. Tucker, director of Metalla Royalty, told Kitco News last month that he sees gold’s ongoing bullish momentum taking the commodity to a US$2,500 price target by the end of 2020.

‘Normally I would say (the bull run is overheated) but what I’m seeing in the daily action is that gold is rising in a very measured way and is not meeting much resistance, so when that’s happening you just step out of the way and let it go, that’s what you do,’ Tucker said.

‘At some point you will have a correction, but you’re not going to have the correction yet. So when you see a chart moving like this, you take your position’ he added.

Frank Holmes, CEO of US Global Investors, is even more bullish about prices, predicting that gold’s price could top US$4,000 in the ‘next couple of years…because of economic forces’.

‘If we look back over the past 20 and a half years of this century, gold has been up 80% of the time. But most people are so quick to be bearish on it. Gold is outperforming the S&P 500 by almost three to one,’ said Holmes.

‘So I think we are going to see in this cycle a greater adoption of gold as an important asset class, rebalanced once a quarter or once a year, but it should be in your portfolio,’ he concluded.

How to buy and sell Gold with IG Bank

Are you feeling bullish or bearish on the Gold price? Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  1. Create a live or demo IG Bank Trading Account, or log in to your existing account
  2. Enter <Gold> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

React to volatility on commodity markets

Trade commodity futures, as well as 27 commodity markets with no fixed expiries.

  • Wide range of popular and niche metals, energies and softs
  • Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
  • View continuous charting, backdated for up to five years

See opportunity on a commodity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a commodity?

Don’t miss your chance. Upgrade to a live account to take advantage.

  • Analyse and deal seamlessly on fast, intuitive charts
  • Get spreads from just 0.3 points on Spot Gold
  • See and react to breaking news in-platform

See opportunity on a commodity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.