Before diving deeper into the price of gold and its possible trajectories for the upcoming five-year period, we must first understand the key reasons as to why gold retains its importance as a commodity and still attracts billions in capital to this day. 

Some key reasons why investors choose gold are:

• Inflation hedge - Historically, gold has been a reliable hedge against inflation, as the price of commodities and cost of goods increases, the price of gold also increases, as this material is used to produce a wide variety of highly refined goods, such as jewelry, accessories, semiconductors, etc. Investing in gold during periods of high inflation can help the investment maintain its buying power
• Diversification - As gold has a low correlation with other asset classes, it can be seen as a viable alternative to diversify a long-term investment portfolio 
• Crisis hedge - Gold tends to perform well during periods of economic and geopolitical uncertainty, which is why it is considered a safe haven asset
• Store of value - Gold has been a store of value for thousands of years and unlike fiat currencies, is not affected by money printing and other government actions

While there are certain risks associated with buying gold in the short term, investors are typically bullish on gold in the long run, as the supply of the metal is finite and demand is steadily growing. 

What Affects Gold Prices?

Several important reasons can alter the price of gold and each of them has broader implications for the global economy:

• Supply and demand - Much like any other commodity, the price of gold is determined by supply and demand. If the demand is increasing faster than the supply - the price of gold will rise
• Central bank policy - Central banks around the world have massive gold reserves and when they buy or sell gold, this can affect the price on the market
• Economic indicators - Inflation, interest rates, and currency exchange rates are all important factors that can affect the decision of investors and therefore, the buying and selling volume and price of gold
• Geopolitics - Changing geopolitical environments, especially involving some of the largest gold producers in the world, can constrain the supply of gold and increase the price of the gold in circulation 
• Production costs - The costs associated with mining and refining gold are not fixed and major changes can affect the supply and price of gold 
• Market sentiment - The broader market sentiment can have a huge impact on the price of gold. When investors are anticipating a market downturn, they are more likely to buy gold and increase the price 

The price of gold has been met with some bullish momentum since the start of 2023. Hyperinflation, high-interest rates, and a shaky banking system have prompted investors to buy up more gold than usual. Colossal central bank purchases also add to the bullish momentum for gold in the short term. While it is uncertain whether this upwards trend will be sustained in the long run, there are a few key factors that could help investors make an educated guess as to what range the price of the commodity could fall into between 2023 and 2028. 

The price of gold had fallen from the $2,000 range in 2022 to the $1,600-$1,700 range by the start of 2023 and has since climbed closer to $1,900:

Here are some important factors that could affect the price of gold over the coming five years:

• Central banks - it is no secret that central banks are buying the largest amount of gold around the world, and 2023 has seen the central banks of Qatar, Turkey, Uzbekistan, and China dramatically increase their gold holdings. If inflation and recession fears are to persist, central banks are likely to continue this trend and buy up even more gold in the coming years 
• Global instability - the ongoing war between russia and Ukraine, as well as the rampant inflation across most of the world, could maintain elevated gold prices in the near-term future
• Interest rates - higher interest rates increase the likelihood of a recession, which would boost the demand for gold and could see the price per ounce reach over the $2,000 mark

If a recession were to take hold somewhere between 2023-2025, the price of gold is likely to reach over $2,200 and an extended period of stagnation could also see gold surpass the $2,500/ounce mark. One factor that may interfere with the gold bull run could be the prevalence of Bitcoin, which is another store of value investors turn to once the financial system comes under stress. 

• Gold is seen as a safe haven asset by the global investment economy
• When the outlook for other assets and the broader economic performance is negative, the price of gold tends to increase
• Central banks around the world have been increasing their gold reserves since the start of 2023
• The price of gold is likely to reach over $2,000 before 2025 and over $2,200 by 2028 if slow economic growth persists 
• As interest rates rise, investors are more likely to prefer bonds and commodities to equity instruments