The price of gold has been in rally mode since the start of 2024 and analysts at one major bank think it can go a lot higher.
In a report for investors, analysts at Citi predicted the price of the precious metal would reach $3,000 an ounce over the next six to 18 months. Gold is currently selling for just under $2,400 an ounce.
In early April gold reached an all-time high of $2,431. However, adjusted for inflation, gold's price of $850 an ounce, reached in January 1980, is still the record. Today, gold would have to reach $3,222 to beat it.
The current rally has been driven by the belief that the Federal Reserve will soon cut interest rates. The price of gold tends to rise in a low interest rate environment since alternatives, like bonds, are less attractive.
But gold prices are also getting a boost from international turmoil as investors seek a safe haven, not only from wars but also inflation. Central banks around the world have also been buying gold in recent months, pushing up the price.
What prompted the bullish call by Citi analysts is an increase in money flows into gold from managed funds. That, the analysts say, will join with the other mentioned factors to drive gold prices higher.
Different ways to buy gold
For investors, there are several different ways to put money into gold. Consumers can purchase physical gold from a gold dealer, but that move should be taken after a bit of research. The ConsumerAffairs research team has vetted major gold dealers and offers an analysis here.
Since last fall, Costco has sold one-ounce gold bars on its website. By the end of 2023, the membership warehouse said it had sold $100 million in gold.
Another way to purchase gold is through an exchange traded fund, or ETF. These funds hold a certain amount of physical gold and trade like stocks, with the price rising and falling with the price of gold.
As with any type of investing, it is always wise to get trusted and objective advice before making a move.
