Analyst Predicts Gold Prices Might Exceed $8,000 in the Next Decade as Central Banks Lose Confidence in Foreign Currency

Gold market analyst Jan Nieuwenhuijs predicts that the current war between Ukraine and Russia, and the global fight against inflation, which has shifted central banks’ preference for foreign currency to gold to predict that gold may exceed the $8,000 price in the next decade. A proposed long-term price model suggests that a troy ounce of gold could hit the $10,000 mark.

Analysts provide rationale for $8,000 gold price

Gold market researcher Jan Nieuwenhuijs predicts that the gold price could exceed $8,000 in the next decade as macroeconomic factors and war change central banks’ preference for reserves Nieuwenhuijs says that the current conflict between Ukraine and Russia, which is being fought by the U.S. government and the U.K., is a major factor in the gold price, and the fight against global inflation will bring about changes in the composition of reserves.

As part of his analysis, which considers the historical percentage of gold held by central banks as a key indicator, Nieuwenhuijssays:

gold as a percentage of foreign exchange reserves in 2022 is 16% compared to the historical average of 59%, and central banks as a whole have an unusual degree of confidence in foreign exchange. However, these central banks are beginning to lose confidence in currencies issued by their peers.

According to his model, if central banks stockpiled 51% of their reserves as gold, the gold price would reach $10,000 per troy ounce. However, Nieuwenhuijs makes it clear that although the central bank will lead this pivot toward gold, private banks and other organizations will also follow this trend.

Central banks indicate strong gold demand

Central banks have been stockpiling gold of late; in 2022, central banks purchased a record amount of gold, increasing reserves by 1,136 tons and decreasing reserves held in the form of foreign currency by $950 billion. The World Gold Council reports that nearly 400 tons of gold was purchased by central banks in the third quarter of 2022 alone.

On March 2, the World Gold Council reported that demand for gold coming from central banks will remain strong in 2023, as 31 tons of the precious metal was added by central banks in January. Turkey was the country that purchased the most gold, acquiring 23 tons.

Other luminaries have also sounded the alarm about the rise of scarce assets such as gold and bitcoin. Robert Kiyosaki, author of the bestseller “Rich Dad, Poor Dad,” predicted in February that gold will reach $5,000 by 2025 and suggested that bitcoin could reach $500,000.

Image credit: Shutterstock, Pixabay, Wiki Commons