Gold market analyst Jan Nieuwenhuijs has predicted that the price of gold could exceed $8,000 in the next decade as central banks buy gold non-stop due to the ongoing Ukraine-Russia war and the global fight against inflation. According to the proposed long-term price model, an ounce of the precious metal could even reach $10,000.
Jan Nieuwenhuis he highlighted the unfavorable macroeconomic factors and the tense political situation. The analyst believes that the current conflict between Ukraine and Russia, as well as the global war on inflation, will trigger a change in the composition of reserves.
As part of his analysis, which uses the historical percentage of gold held by central banks as a key metric, Nieuwenhuijs states:
“Overall, central banks are unusually confident in foreign exchange, with gold as a share of total reserves in 2022 at 16%, compared to a historical average of 59%. However, these central banks are beginning to lose confidence in the currencies issued by their peers.”
According to his model, if central banks stockpiled 51% of their reserves in gold, the price of gold would reach $10,000 per ounce. Nieuwenhuijs says the switch to gold will be followed by private banks and other organizations.
Central banks are hoarding gold
Central banks have recently been accumulating huge gold reserves. In 2022, a record amount of gold was purchased, reserves increased by 1,136 tons, while reserves held in foreign currency decreased by $950 billion. In the third quarter of 2022 alone, central banks purchased nearly 400 tons of gold, according to a report by the World Gold Council.
On March 2, the World Gold Council reported that demand for gold from central banks remained strong in 2023, as stocks were increased by 31 tons of the precious metal in January. Turkey bought the most gold, 23 tons to be exact.
Other personalities have also warned of the rise of gold and other rare assets such as bitcoin. Robert Kiyosaki, author of the bestseller Rich Dad Poor Dad, predicted in February that gold could reach $5,000 by 2025 and also hinted at the possibility that bitcoin could hit $500,000.
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