We know the feeling.
The gold price has dipped. Your TallyMoney balance is down. And you’re wondering when things will turn around.
But it’s important to remember that like any asset, gold doesn’t move in a straight line.
In the short term, there are rises, dips and periods where prices move sideways.
Over the long term though, the gold price is growing as fiat currencies, like the pound, lose purchasing power to inflation and money printing.
The big picture hasn’t changed
When TallyMoney launched in 2019, gold was trading at just over £1,000 per ounce.
Today, even after the recent dip, the price of gold is around three times what it was back when.
That means the sterling gold price has nearly tripled since TallyMoney launched seven years ago.
And savings in a TallyMoney Account have gone up by over 15% per year on average since launch.
Has it been a straight line upwards?
Definitely not.
There were short term dips in the gold price back then, just as there are now. But zoom out and the long-term trajectory is clear.
The supply of fiat currencies like the pound is expanding across nearly all major economies. Inflation is baked into the system as governments around the world grapple with mounting sovereign debt.
The result? Over time, prices across the economy keep rising, especially for scarce assets like gold.
That difference matters.
Don’t take our word for it
We’re not the only ones banging on about the direction of travel.
The world’s leading analysts and investment banks are also forecasting significant increases in the price of gold:
Metals Focus, the London-based independent research consultancy, is forecasting the gold price to reach as high as $5,330 (£4,039) per ounce in 2027.
Barclays expects the gold price to increase to $4,900 (£3,714) in 2027.
Goldman Sachs is also forecasting the gold price to increase to around $4,900 (£3,714) per ounce by the end of 2026.
J.P. Morgan is even more bullish, forecasting gold at around $6,000 (£4,547) per ounce in Q4 2026, with approximately $6,300 (£4,774) possible by the end of 2027.
Of course, forecasts are never guarantees, but when this many forecasters are predicting growth in the gold price, it’s worth paying attention.
Why gold is growing in the long term
There are several big, macro trends driving demand for gold.
Currency debasement and inflation
The supply of pounds is expanding over time. It’s often called ‘money printing’ and it effectively means the pound is being debased.
At the same time, inflation is elevated and seems to be getting worse, not better.
Not only that, but the Bank of England’s official ‘inflation target’ is 2%. So even if inflation is ever brought back to its target level, prices still rise, including the gold price.
Global debt expansion
Government debt around the world, including here in the UK, is at unsustainable levels. Even just paying off the interest on our sovereign debt costs us over £100bn per year – more than our entire defence budget.
This means that inflation suits the government as a way of diluting the real value of the debt. It also drives demand for gold as confidence in fiat currencies fades, and people and institutions look for safe haven assets.
Central banks are buying gold
Central banks have been buying gold in record amounts in recent years.
In fact, many central banks now hold more gold by value than US treasury bonds. This is the first time that has happened in roughly 30 years.
They hold it because it has no issuing government, no counterparty credit risk and can help reduce reliance on any one currency or sovereign bond market.
And central-bank surveys suggest many expect their gold holdings to keep rising.
Geopolitical tensions
Wars, sanctions and increasing tension between major economic powers have made countries think more carefully about where they hold their reserves.
Gold sits outside another country’s financial system, which gives it particular appeal during uncertain times.
Demand for a safe haven
When confidence in markets, currencies or governments falls, investors often look for somewhere else to preserve value.
Gold has been playing that role for thousands of years.
So, should you worry about the dip?
Short-term dips can feel uncomfortable, particularly when you can see the movement in your TallyMoney balance.
Since TallyMoney launched, we’ve seen plenty of them.
But over the long term, gold has been proven to grow in price. Just look at the charts:
- Over the last 3 years, the gold price has more than doubled
- Over the last 10 years, the gold price has more than tripled
That’s why short term dips are no reason to panic.
Nobody knows exactly what gold will do next week, next month or even next year.
But the longer-term question remains the same:
What will your pounds buy in another seven, ten or twenty years?
With TallyMoney, every 1 tally represents your ownership of 1 milligram of physical gold.
So while the gold price may dip from time to time, we think it pays to keep your eyes on the bigger picture.
