Amid the global economic landscape, where inflation fears loom large, gold prices are poised for a substantial rise, potentially reaching $3,500 an ounce by the end of 2025. This projection comes from Ed Yardeni, president of Yardeni Research, who draws parallels between the current inflationary trends and the economic patterns of the 1970s.
The 1970s Inflation and Gold Price Surge
Yardeni's forecast is rooted in historical precedence, specifically the Great Inflation era of the 1970s when gold prices experienced a meteoric rise from $35 an ounce to a peak of $665.
"The price of gold soars to a new high. Another wage-price spiral associated with rising oil prices will look a lot like the Great Inflation of the 1970s, when the price of gold skyrocketed," Yardeni explained in a client note, according to Business Insider.
According to Yardeni, if inflation follows a similar trajectory to that of the 1970s, the target price range for gold of $3,000 to $3,500 per ounce by 2025 is within reach.
The forecast by Yardeni Research comes at a time when gold prices have been on an upward trajectory, breaking records repeatedly since the start of the year.
Factors such as geopolitical tensions, demand fluctuations in China, and indications of the Federal Reserve moving towards interest rate cuts have all contributed to gold's recent rally.
