Gold price hits new record today – and these experts believe the XAU USD could go even higher

Just days ago, on April 8^th, we reported that the gold price had hit a record high. And now, gold and the XAU/USD has done it again.

This morning (April 12^th), the XAU-USD price rose to just under $2390 per troy ounce in the Asian trading session, falling down slightly shortly afterwards to $2,385.60 per ounce. Then, later in the session, the gold price did it again, with the XAU USD topping out at around $2395 per troy ounce against the US dollar.

This is the second record high for gold in under a week – but why? And where to from here?

Get ready for gold to break out again

This is only the beginning for gold’s winning streak, according to experts.

John Hathaway, senior portfolio manager at Sprott Asset Management, said in a Sprott insights report yesterday that the gold price “could potentially rise another 25%” in 2024 still.

Assuming a spot gold price of $2,385 (which is where the XAU/USD was hovering at the time of this article going to press), that means a gold price will reach a high of around $2,982.50 sometime in the coming months.

Meanwhile, Coin Price Forecast has an even more bullish and specific prediction:

According to the latest long-term forecast, Gold price will hit $2700 by the middle of 2024 and then $3000 by the middle of 2026. Gold will rise to $3,500 within the year of 2028, $4,000 in 2029 and $5,000 in 2033.”

This is more than both of this week’s all-time high prices for gold… put together. It means the gold price will have more than doubled in that time.

Why is the gold price rising so high?

Periods of high inflation are typically associated with a rising gold price. So are significant amounts of geopolitical tensions on the world stage.

Jana Kane, of trading blog LiteFinance, explains the rise in this way:

Large market actors grew particularly interested in gold buying at the beginning of March 2024 on the back of a US macroeconomic data release… US indexes also hit new highs, like gold quotes. A correction will happen sooner or later, so investors hedge their positions through gold to secure their money. It should be noted that growing tensions in Eastern Europe and the Middle East have market participants developing more conservative approaches. Another driver in the increased demand for gold is active gold buying by central banks amid fears linked to the precedent of confiscating and freezing Russian gold and foreign exchange reserves.”

Another element which could raise the gold price even higher later on in the year is the fact that, historically, gold tends to outperform during periods of interest rate cutting, according to Hathaway.

Watch out for mining companies this earnings season

Another useful bit of information on the gold price which we gleaned was again from Hathaway, who said that there’s significant opportunity in gold mining stocks.

These are sure to benefit from a gold price boom, but are for the moment comparatively undervalued as stocks, after years of lacklustre gold returns.

In our view, gold mining stocks offer upside potential disproportionate to that of bullion. Against the 18% gain of bullion since the February low, mining stocks (GDX) have increased nearly 32%… Costs stabilizing combined with sustained higher metals prices would translate into dramatic gains in profits and cash flow [and] improving earnings has the potential to generate interest in the sector.”

With earnings season for Q1 having started, this means that the latest financial results for companies like Barrick Gold, Rio Tinto, Glencore and more will soon be incoming.

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