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How long will gold prices stay high?

Gold prices could reach new heights in the weeks and months to come. Getty Images/iStockphoto

Over the past few weeks, gold prices have had a strong run. They approached near-record highs and spent a sustained period above the $2,000 threshold. 

While today gold prices are down slightly, they're still up by 6% from last May, according to data from the World Gold Council. And given the economic uncertainty many investors are facing today — coupled with gold's reputation as a safe bet during periods of volatility — gold prices could stay elevated for a while still, or even go higher.

If gold's current price run has you considering adding the precious metal to your portfolio, then consider requesting a free information kit to learn more.

How long will gold prices stay high?

There are a few different factors driving gold's price up, leading many investors to believe that it will remain high for at least the next several months.

For one, a looming recession could send traditional investments like the stock market into a period of volatility — increasing demand for gold as a way to add some stability. Gold is often seen as a safe haven during recessions and as long as investors expect an economic downturn, they may keep adding gold to their portfolios.

Another factor is the decreased value of the U.S. dollar. Gold historically performs well when the value of the dollar is down. The dollar's value began rising when the Fed began rate hikes last year and even reached a 20-year high last fall. But it's fallen this year and could continue on the current downward trend as the Fed signals it could be ready to pause rate hikes — a good indicator for gold. 

Given those inputs, some experts say that gold prices will not only remain at today's highs but reach new peaks in the months ahead. Strategists at UBS just last week published a prediction that gold would hit $2,100 per ounce by the end of this year and $2,200 by early next year — while stating it "should remain a hedge within a portfolio context." 

Explore your options for investing in gold with a free information guide today.

Why now is a good time to invest in gold

Given the economic uncertainty and market volatility investors are facing across the board — from a potential debt crisis to coming recession and high interest rates — gold can serve as a stabilizing force in the current environment.

Gold is traditionally seen as a hedge against inflation — like we've seen over the past few months — but it can also be a good bet ahead of a recession and against market volatility. 

For long-term investors, gold can be a useful investment in any economy. Experts typically recommend allocating a small portion of your overall portfolio (around 5% to 10%) to alternative assets like gold. You'll still want to keep a significant portion of your portfolio in assets that have a higher likelihood of growth over time, like stocks and bonds. While these investments can help you build wealth, gold may act as a safe haven to help you stay afloat during periods of downturn or market losses. 

The bottom line

Gold's price may have increased over the past several weeks, but there's reason to believe that it's not yet at its peak. With a volatile economy creating uncertainty in other markets, gold is one way investors can maintain some stability and possibly even see growth over time. If you're looking to diversify, taking advantage of gold's current value and expected rise could be something to consider. 

A free investors kit can help explain more about the benefits of gold investing today.

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