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MoneyWatch: Managing Your Money
By Joshua Rodriguez
Edited By Angelica Leicht
/ CBS News
Gold has long been sought after as an investment. There are numerous gold assets you can invest in, fromgold IRAsto gold stocks, gold ETFs and physical gold. Part of the allure is that the precious metal is considered asafe-haven assetthat can help investors balance risk and reward within their portfolios.
Plus, it also has a history of value growth.
But how fast does the value of gold grow? If you're going to add it to your portfolio, it's important to understand what you can expect in terms of growth over time. So what can we expect gold to be worth in five years?
Learn about your gold investing options now.
What will gold be worth in 5 years?
It's tough to tell how much money gold will be worth five years from now. That said, there's a high likelihood that gold's price will be higher in five years than it is today. Here are a few reasons why:
Gold has historically grown in value
The price of gold has grown consistently throughout history. That said, gold's value can dip from time to time, but over the long term, the value of gold has historically increased. In fact, gold experienced an average annual growth rate of 11.2% over the past 20 years, according toOxford Gold Group.
There were, of course, times when gold's value grew at faster or slower rates — and even times when gold's value declined. But all general, gold's value has historically increased over time. Should history repeat itself, gold's value will likely continue to grow over time.
Take advantage of gold's unique benefits by adding it to your portfolio today.
Experts expect gold prices to go up
While it's unlikely that any expert would be right 100% of the time in terms of asset predictions, when they make predictions, they're typically backed by reputable data and research. And, many experts agree that gold is likely to increase in value in 2024 — and will likely continue to experience long-term growth.
How the value of gold could grow
It's impossible to predict what will happen in the market over the next five years. However, one way to make a prediction is to do the math based on the current price of gold and gold's average annual growth rate.
As of December 19, 2023, the spot price of gold was $2,024 per ounce. Considering an annual growth rate of 11.2%, an ounce of gold could be worth about $2,251 in one year. In five years, an ounce of gold could be worth about $3,441, provided that the value continues to grow at a rate of 11.2%.
Why you should add gold to your investment portfolio
There are several reasons to consider investing in gold, including:
- The potential for strong growth: In today's high interest rate environment, most safe assets like CDs are paying returns of under 6%. The 11.2% average annual growth rate of gold is much higher and could increase your overall return.
- Inflation: Although inflation has been cooling, it's still relatively high. Prices grew 3.1% year over year in November. That's down from 3.2% in October, but it's still above the Federal Reserve's 2% inflation target. As long as inflation remains high, it will likely support gold's price growth.
- Unexpected market volatility: Financial markets can take unexpected turns from time to time, and while there's no guarantee it will happen in the near future, it's always wise to be prepared. Diversifying your portfolio with gold could help protect your portfolio in the event of unexpected market volatility.
The bottom line
It's impossible to accurately predict exactly what will happen with gold prices over the next five years. There are too many factors that impact gold's price. However, the value of gold has historically seen long-term gains, and many experts believe that the price of gold is likely to continue to grow over time. So, there's a strong chance that gold will be worth more in five years than it's worth today.
