Gold at $6600? Jefferies' Chris Wood raises long-term gold price target — here's his rationale

Gold price target: Amid the latest leg of the bull run in gold prices, Chris Wood, the global head of equity strategy at Jefferies, has raised his long-term gold price target after a five-year gap.

In his latest GREED & fear report, the veteran market analyst has suggested that gold prices could climb as high as $6,600 per ounce in the long term, based on historical benchmarks and the growth in US disposable income per capita.

His comments come against the backdrop of gold touching a record high of $3,700/oz level this week in the run-up to the Federal Reserve's policy outcome on Wednesday. However, since then, the gold has faced some consolidation as analysts believe the rate cut was priced in and amid a hawkish Fed tone.

Chris Wood's rationale for gold price targets

Chris Wood had initially set the target of $3,400 back in 2002, which was crossed recently, after almost 23 years. However, the Jefferies analyst recently told Business Today that he believes it should have happened 10 years ago, given all the "crazy things happening with G7 monetary policy".

The target was calculated by adjusting the 1980 peak gold price of $850/oz by the then 6.3% annualised growth in US total personal income, which has occurred since January 1980. That gave a gold price target of $3,437/oz.

This methodology led to a revised target of $3,700/oz in 2005, and later refinements were made using US disposable personal income per capita as a more precise measure.

Over time, the long-term gold price target was updated in line with income growth — $4,200/oz in March 2016, $5,500/oz in August 2020 and to $6,600/oz in September 2025.

Wood argues that if gold were to again represent 9.9% of US disposable income per capita, as it did at the peak of the last secular bull market in January 1980, the yellow metal's price would need to rise to $6,571/oz — effectively setting a new target of $6,600/oz for this current secular bull market.

Meanwhile, GREED & fear maintains the 40% weight in gold bullion in the global portfolio for a US dollar-denominated pension fund first set up at the end of 3Q02. Gold was reduced from 50% in December 2020 when GREED & fear first allocated an investment in Bitcoin in the same portfolio.

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.