New research out today from BullionVault says half of private investors (49.5%) forecast the price of gold will increase by 10 per cent by the end of the year, to around $2,125 per troy ounce.
Some are even more bullish; 15% believe the price will increase by 20%, while one in five (21%) predict no change. That gives a consensus outlook for gold to end 2023 at $2,110.
BullionVault today cares for £3.1 billion of precious metals for more than 100,000 users worldwide, almost 90% of them living in the UK, Europe or North America.
Its latest customer survey – now run twice a year since 2014 – polled over 1,440 responses from private investors saying, on average, that they currently hold four-fifths of their investable wealth in other assets besides precious metals.
That’s reflected in the survey results, as diversification remains the most important reason named for adding precious metals to a portfolio (39%), followed closely by inflation (32%).
Looking ahead, investors responding to BullionVault’s survey believe monetary policy (such as interest rates and quantitative easing or tightening) will have the greatest impact of gold prices and other precious metals between now and the end of this year (33%), followed by geopolitical issues (17%) and the size of government spending and deficits (16%).
| What will most impact gold and other precious metals in H2 2023? | % response |
| Monetary policy (eg, interest rates, quantitative easing or tightening) | 33.0% |
| Geopolitics (eg, Russian instability, the war in Ukraine, US-China tensions) | 17.3% |
| Government spending (and the size of government deficits) | 15.5% |
| Inflation in consumer prices (including if you think the inflation level will drop) | 12.9% |
| Gold demand vs. supply | 7.2% |
| Direction of world stock markets | 7.1% |
| Trading in gold derivatives (futures, options etc) | 4.6% |
| The direction of commodity prices (eg, crude oil) | 2.4% |
Adrian Ash, Director of Research at BullionVault, commented: “Gold tends do well when other assets perform poorly. With the precious metal continuing to outpace the FTSE and global stock markets since the eve of the terrible shocks from Covid and then inflation, private investors remain confident in gold’s role as portfolio insurance.
“Because gold pays no income, rising interest rates could present a headwind to the bullion market. But gold shrugged off rising interest rates in the first half of 2023 to reach new all-time highs in terms of all major currencies, including the Pound.
“Private investors using BullionVault to spread their risk with physical precious metals now expect gold to set a fresh all-time high by New Year 2024, and after a dip in June, gold has already rebounded so far this month as interest-rate forecasts switch from higher-for-longer to peaking-sooner-than-later thanks to inflation data suggesting that the worst may be behind us.
“The gentler outlook for inflation and interest rates, plus the floor beneath gold prices coming from strong central-bank and Asian consumer demand, make another ten per cent increase by year-end very possible, especially if the broader economic picture turns markedly gloomier.”
