Gold has long been considered a safe haven asset, a reliable store of value in times of economic uncertainty. But as we move further into the 2020s, investors are asking: is gold still a good investment? Is gold jewellery a good investment? Should I invest in gold?

To answer this question, we need to delve into the factors shaping the future of gold prices and consider how investing in gold fits into a modern investment strategy.

Economic Outlook and Gold Prices

The global economic landscape – inflation, interest rates, and geopolitical risks – plays a crucial role in determining gold price forecasts and investor sentiments toward gold.

In times of high inflation, gold often acts as a hedge, preserving purchasing power as currencies lose value. Geopolitical instability can also drive up demand as investors seek safe haven assets. Similarly, when interest rates are low, the opportunity cost of holding gold decreases, making it a more attractive investment.

Hence, with rising interest rates across central banks worldwide, Goldman Sachs is anticipating a rise in gold prices accordingly, up to US$3,000 per ounce by end 2025. However, this doesn’t mean gold prices will definitely skyrocket. Factors such as inflationary pressures and geopolitical tensions could still depress prices, so it’s important to keep abreast of the latest economic developments and their potential impact on gold.

Gold Supply and Demand

Beyond macroeconomic factors, the dynamics of gold supply and demand also influence the future of gold prices.

Production from mines has been relatively stable in recent years, while demand from various sectors continues to grow. The World Gold Council reported a total gold supply increase of 4% (YoY) in Q2 2024, with notable increases in Indonesia, Canada, Côte d’Ivoire, and China.

On the demand end, the jewellery industry remains a significant consumer of gold, particularly in India, where value of demand increased 13% (YoY) to more than US$36 billion in Q3 2024. While demand for gold bars and coins dropped 9% (YoY), ETF and OTC investments have been rising steadily as investors seek to diversify their portfolios. Other sectors such as technology and IT also utilise gold in various applications, contributing to overall demand.

Investment Diversification

Diversification is a cornerstone of any investment strategy, and the same advice rings true for gold too.

If anything, with its low correlation to traditional assets like stocks and bonds, gold can play a valuable role in mitigating portfolio risk. When stocks and bonds decline in value, gold often moves in the opposite direction, acting as a buffer against losses. This makes it an attractive addition to a balanced portfolio, particularly during times of economic uncertainty.

Ultimately, while gold may not always offer high returns, its ability to preserve capital and provide stability makes it a valuable component of a long-term investment plan.

Assessing Gold’s Prospects for Investing

While predicting the future of gold prices in Singapore with certainty is impossible, expert opinions can offer valuable perspectives on gold's prospects. Keeping abreast with the latest analysis from financial analysts and gold market experts can provide key insights into factors influencing prevailing gold prices and their outlook for the coming years. Investors should consider the diverse perspective provided and conduct their own research before making investment decisions.

MoneyMax offers a range of gold investment options for those seeking to invest in its enduring value, including gold bars and investment-grade gold jewellery. We are committed to providing our customers with the information and resources they need to make informed investment choices.

Explore MoneyMax's options for investing in gold and consider buying gold for your portfolio today.