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According to Jan Nieuwenhuijs, a gold market analyst, gold prices could rise over $8,000 over the next ten years as central banks turn to gold as a safe haven for foreign currency due to the ongoing conflict between Ukraine and Russia and the global fight against inflation. According to the suggested long-term pricing scenario, the price of a troy ounce of the metal may reach $10,000.
Analyst Makes Case for $8,000 Gold Prices
In the coming decade, the price of gold may exceed $8,000, according to gold market analyst Jan Nieuwenhuijs, as central banks change their reserve preferences as a result of macroeconomic factors and conflict. The ongoing confrontation between Ukraine and Russia, as well as the worldwide fight against inflation, according to Nieuwenhuijs, will lead to a change in the reserve composition.
Nieuwenhuijs makes the following assertion as part of his study, which uses the historical percentage of gold held by central banks as a crucial metric:
Overall, central banks have an uncommon amount of faith in foreign exchange, as evidenced by the 16% share of total reserves accounted for by gold in 2022 compared to the historical average of 59%. But, these central banks are beginning to have less faith in the money that their competitors have issued.
According to his calculation, the price of gold would reach $10,000 per troy ounce if central banks kept 51% of their reserves in gold. Nieuwenhuijs makes it clear that although central banks will be leading this shift to gold, private banks and other institutions will also adopt the style.
Central Banks Show Strong Gold Demand
Recently, gold has been accumulated by central banks. Central banks increased their gold holdings by a record 1,136 tonnes in 2022, while their foreign exchange holdings decreased by $950 billion. Central banks bought approximately 400 tonnes of gold in Q3 2022 alone, according to data from the International Gold Council.
The International Gold Council projected on March 2 that central banks’ demand for gold would remain high in 2023 despite their addition of 31 tonnes of the priceless metal in January. At 23 tonnes, Turkey was the nation that bought the most gold.
The ascent of gold and other rare assets, like bitcoin, has also drawn the attention of other public figures. The best-selling author of Rich Dad, Poor Dad, Robert Kiyosaki, forecast in February that gold may reach $5,000 by 2025 and hinted that bitcoin would hit $500,000.
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