Gold Price Shoots Up, But Could It Come Down Too?

The gold price continues to set record highs this year, crossing the $3,300 barrier just weeks after hitting $3,000 for the first time ever. With such amazing gains, the gold price is garnering more and more media attention.

Of course, one nagging question that many people have is, could the gold price ever fall significantly? After all, what goes up must come down, and we’ve seen plenty of major price fluctuations over the years in stock markets, cryptocurrency, and other assets.

So will the gold price continue on its present course, or might we see a correction at some point in the future?

3 Key Takeaways

• While gold is generally considered a countercyclical asset, its price can still fall even when stock markets are falling.
• Analysts today are forecasting a bullish outlook for the gold price, even outlining a case for gold to hit $4,500 an ounce this year.
• Your decision to buy gold may depend on your unique goals, your view of the economy, and your outlook for the gold price.

Gold, Markets, and Volatility

One thing to keep in mind is that gold prices, like any other price, go up and down as supply and demand change. So while gold may be up today, it could easily go down again tomorrow.

In fact, in the aftermath of President Trump’s tariff announcement in early April, gold prices fell significantly just like stock markets did. In the week after Trump’s announcement, the gold price fell over $150, falling to below $3,000.

Now you may be asking yourself, isn’t gold supposed to go up when stock markets go down? Isn’t gold supposed to be a countercyclical asset with low correlation with stock markets and conventional financial assets?

Yes, in general and over the long term, gold is supposed to be a countercyclical asset with low correlation with other assets, which is one reason it is a popular asset with which to diversify portfolios.

But that doesn’t mean that gold won’t drop in price, nor does it mean that it will always go up when stock markets go down.

Lest you think this month was an anomaly, let’s look back to gold’s price performance in 2008.

Gold made significant gains in early 2008 as the economy began to falter, breaking the $1,000 barrier earlier in the year. But gold then proceeded to fall 30% over the next several months.

When financial markets panicked in late September, the gold price moved up and down before hitting a low in November. But eventually gold decoupled from the panic and began to rise again, hitting all-time highs in 2011 while stock markets still hadn’t fully recovered.

Gold Prices Now and in the Future

So what does this mean for the gold price today?

It means that just because the gold price is high today doesn’t mean that it’s going to stay that way. If the current unease over tariffs results in an all-out recession or another financial crisis, the gold price could very well perform like it did in 2008, falling as people sold gold to come up with cash.

That’s not to say that there’s anything negative about the outlook for gold right now. Analysts are already revising their price forecasts, expecting higher gold prices.

Goldman Sachs expects gold to hit $3,700 by the end of the year, with $3,880 a possibility if recession occurs. In a “high-risk scenario”, gold could even hit $4,500 an ounce by the end of the year.

Analysts at UBS and Deutsche Bank are similarly bullish, with price forecasts of $3,500 and $3,700 an ounce respectively.

But just because there’s a bullish trend right now for the gold price doesn’t mean that we should throw caution to the wind and assume that gold will go up forever.

Even though the overall trend over the past 25 years has been for the gold price to move higher, there have been plenty of times when the price has gone down. And if you’re looking to buy gold, the price of gold today might be of less concern to you than the price of gold when you decide to sell it sometime down the road.

Can You Take Advantage of Rising Gold Prices?

At Goldco, we like gold. A lot.

We’ve sold over $3 billion in gold and silver over the years and have received over 6,000 5-star reviews from our customers.

We have helped thousands of Americans benefit from owning gold, whether that’s through buying gold with a gold IRA or making direct cash purchases of gold coins and gold bars.

We want you to like gold too. And we want you to be happy with the gold you buy from us.

We can’t tell you that gold is going to keep gaining 10-20% per year like it has for the past couple of years, because no one knows whether that will happen.

If the US economy strengthens and tariffs end up being much ado about nothing, could the price of gold fall for three years in a row like it did from 2013 to 2015? Sure, that’s possible.

If the US economy falls into recession or stagflation, could the gold price rise at an annualized rate of over 30% per year like it did throughout the 1970s? Sure, that’s possible too.

While we all wish we had a crystal ball to see which way the gold price is going to move, that doesn’t exist.

At the end of the day, your decision as to whether or not to buy gold may come down to your views on the health and strength of the US economy, your outlook on the future, and your particular goals.

If you think gold is a good choice for you and you want to buy gold, whether it’s because you want a solid safe haven asset, a hedge against inflation, or just to diversify your portfolio, we hope you’ll do business with Goldco.

We’ve worked hard to make ourselves one of the best gold companies in the country, and we strive every day to deliver to our customers the quality precious metals products and exemplary customer service that they’ve come to expect.

So if you are looking at hopping on the gold bandwagon, call Goldco today to learn more about how you can put gold to work for you.