A 50-year graph of the spot gold price paints a sobering picture. After it peaked at US$589/oz in 1980, it declined gradually for the next 21 years. It took another four years to get back to its 1980 level and another six years of gradual acceleration to peak at $1,921/oz in 2011.

If cycles are any guide, gold’s next peak will be in 25 years’ time, barring a major crisis.

But there are no indications that the kind of shocks that caused gold’s last two peaks will occur in 2018.

In 1980 investors were responding to the oil squeeze and in 2011 they took refuge from concerns about European debt defaults.

A potential problem on the horizon could be a collapse in cryptocurrencies. But while both gold and bitcoin are seen as a store of value, various analyses over different time periods have found no reliable positive or negative correlation between the two, or, in fact, between bitcoin and any other traditional asset.

Cryptocurrencies are still too peripheral to present a threat to global economic stability. Writing in Forbes in September, Jason Bloomberg, president of digital industry analyst Intellyx, speculated that the probability of a bitcoin implosion affecting the global economy is 1%.

While bitcoin and its imitators may keep powering ahead for a while, forecasts for gold for the coming year are not ambitious. As 2017 drew to a close, gold was showing an 11% gain on 2016 but only slowly recovering from a tumble in November brought on by renewed fears that the US Federal Reserve would hike interest rates more aggressively than previously expected. High US interest rates attract money from gold to US treasury bonds.

Though the curve is flattening, it is far from inverting, which flags the risk of a recession, Gambarini says. Capital Economics expects the US economy will continue to grow at a healthy 2.5% in 2018 and so the risk is that interest rates will rise faster, which is negative for gold. Even when the curve does invert, it has not always been a predictor of a recession within the ensuing two years. Still, it is possible the curve could invert in 2019, signalling the risk of a recession. This could push gold to $1,350/oz by end-2019, she says.

 If 2017 marks the end of a multiyear period of US dollar strength, gold could benefit from that tailwind, unlike the headwind that it has experienced since 2001

Those fears ebbed, but there was also uncertainty about the implications of US tax reforms cutting corporate and personal tax rates aggressively. One view was that the move would increase investors’ risk appetite and strengthen the dollar, which is negative for gold, but the counterargument was that it would swell the US budget deficit, which is negative for the dollar and positive for gold.

One of the most respected gold forecasters, Martin Murenbeeld of Murenbeeld & Co, expects gold to rise gradually over the course of next year to an average of about $1,347/oz in the fourth quarter, about 9% more than 2017’s average, though he says it is possible it could touch $1,400/oz at some point.

Capital Economics commodities economist Simona Gambarini says the current change in the slope of the US yield curve, which represents the difference between the 10-year and two-year US treasury yields, is sometimes seen as positive for gold. But the relationship is far from perfect and Capital Economics believes gold is more likely to fall to $1,200/oz over the next year than to rise.

John Reade, chief market strategist of the World Gold Council, says there are several reasons why gold may continue to appreciate in the coming year. Tightening US monetary policy or reversal
of the stimulatory monetary policies of the EU, Japan or China could play a role.

"Away from monetary policy, we view two other factors as potentially important for gold. First, the ongoing strength — or otherwise — of already expensive US equities. And second, the trajectory of the US dollar," Reade says.

"We believe that the bull market in US equities has reduced gold’s appeal in 2017: an end to that trend could reignite demand for gold. The direction of the US dollar could also be important: if 2017 marks the end of a multiyear period of US dollar strength, gold could benefit from that tailwind, unlike the headwind that it has experienced since 2001."

In the long term, income growth is the most significant driver of gold demand and the trends are positive, he says. China has avoided a hard landing and the Indian economy is recovering from recent policy shifts.

Reade says there are structural changes in gold markets that could have long-term positive consequences, such as potential cuts in the Vat rate applied to gold bars in Russia, the development of Sharia-compliant gold products and development of a spot gold exchange in India.