Follow Gold and Silver Alerts Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
With six catalysts driving the gold price forecast, the yellow metal should easily eclipse its all-time high of $1,895 within the next few years.
That's a 53% gain from the current gold price of $1,236 an ounce.
While one or two strong catalysts can be enough to drive an investment higher, multiple catalysts increase the likelihood of truly monster gains.
"The more catalysts you have, the bigger bang for the buck," said Money Morning Executive Editor William Patalon, III.
Patalon, who writes often about gold investing in his Private Briefing newsletter, says we're witnessing an unusual confluence of no fewer than six gold price catalysts right now.
Gold Price Forecast Catalyst No. 1: Global Threats Increasing
While global turmoil never recedes completely, threats to world peace have been on the rise lately. Conflict breeds uncertainty in the markets, which historically has pushed gold prices higher.
Russia, under President Vladimir Putin, has shown a willingness to challenge the world's democracies any way it can, from its annexation of the Crimean peninsula in 2014 to its alliance with Syrian President Bashar al-Assad to its attempts to influence last year's U.S. elections.
Both North Korea and Iran have threatened the United States outright. China has become increasingly belligerent in regard to its territorial claims in the South China Sea.
Each of these flashpoints now has the added uncertainty of President Donald Trump, who in his first two weeks in office has managed to touch off numerous diplomatic firestorms.
Gold Price Forecast Catalyst No. 2: Stock Markets Losing Appeal
With the U.S. stock markets hovering near all-time highs, investors will be reluctant to keep shoveling more money there. Foreign markets are even less inviting.
Emerging markets remain at risk to a strong U.S. dollar. European stocks face uncertainty from Brexit as well as lingering concerns about the multination debt crisis, especially in Greece. Corrupt governments and a lingering recession plague the major Latin American economies. The economy in China is slowing, and the yuan continues to weaken.
Getting respectable returns from stocks will be tough for the foreseeable future.
And things look worse for the bond market…
Gold Price Forecast Catalyst No. 3: Watch for Rising Bond Prices
Nearly 10 years of low interest rates made bonds attractive, particularly for investors seeking to minimize risk. But now bond yields are starting to rise again, which means prices are falling.
This epic shift was most obvious in the wake of Donald Trump's presidential election victory. In the two days following the election, the global bond market surrendered more than $1 trillion.
Related: The Money Morning Essential Guide to Buying Gold & Silver
A sustained period of rising interest rates will make owning bonds a losing proposition.
"Bonds will be a bad place to be," Patalon said.
When it becomes clear the safe haven bonds have provided for the past decade is no more, investors will look to gold.
Gold Price Forecast Catalyst No. 4: Rising Inflation
Inflation hasn't been a concern in the United States since just before the 2008 financial crisis. In fact, the U.S. Federal Reserve has spent most of the past decade worried that inflation is too low.
But that's changing now. And inflation by definition will cause gold prices to rise.
Inflation rises as the economy begins to prosper. Kiplinger's latest forecasts for the U.S. economy have annual growth stabilizing at about 2% this year then rising to 2.5% to 3% in 2018 and 2019 – better than it's been since before the Great Recession.
And President Trump's economic policies will feed this trend. His proposal for up to $1 trillion in infrastructure spending will help stimulate the U.S. economy – and ignite inflation.
Of course, as inflation rises, the U.S. Federal Reserve will be compelled to raise interest rates.
Most people assume higher rates depress gold prices. But a deeper look proves otherwise…
Gold Price Forecast Catalyst No. 5: The Fed Hikes Rates
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.