If this prediction is realised, this would mean an 11% gain in British pound gold prices, taking it from £1,505.16 per Troy ounce in 2022 to £1,671.46 this year.

In dollar terms, the forecast would see the gold price push through the $2,000 barrier at $2,012.60, according to a survey from BullionVault, the precious metals marketplace.

It said the return would make 2023 the fourth year in five where gold has delivered double-digit rises to UK investors, “meaning it could outperform other shares and bonds once again and even beat expected inflation rates”.

The gold price rose steadily throughout December 2022 in both dollar and pound terms and this week, it has already come within £35 of its all-time high of £1,580 per ounce, BullionVault revealed.

It said that a “January pop” is very common, with both gold and silver rising 14 times at New Year in dollar terms since 2002.

And given that investors continue to worry about rising inflation, they said the number one reason for investing in physical bullion is to “spread risk” and diversify their portfolios.

BullionVault director of research, Adrian Ash, said: “Private investors’ understanding of this year’s dynamics in the gold market reflects the reality of 2022. War, inflation, and a plunging stock market may sound like the perfect storm for precious metals. But because physical bullion pays no income, rising interest rates offset those factors, capping the gains in gold and silver while leaving them as the only tradable assets outside the energy sector to match or beat the cost of living and hold their value in real terms.

“While gold and silver prices both made wide swings in 2022, precious metals worked to help investors spread risk and reduce the hit from inflation. A UK portfolio holding 60% in shares and 40% in bonds would have lost 8.3% even before inflation. Putting one-tenth into gold and another tenth into silver would have halved that loss to 3.9%.

“Fear and doubt across wider financial markets mean gold and silver have begun 2023 with a typical New Year surge, attracting speculative inflows as traders see weak growth, strong inflation and a worsening geopolitical outlook ahead.”

Five gold investing mistakes to avoid

When it comes to investing in physical gold, Ash shares these five mistakes to avoid:

1) Don’t buy coins or small bars

The extra production costs will eat into your investment. Similar to jewellery, the smaller the gold unit gets, the higher the unit cost. It’s best to buy into the wholesale gold market as much as possible and the most obvious way to invest in physical gold directly is by purchasing bars.

2) Don’t fall for ‘rare’ offers

Truly rare coins are a specialist investment which is very different from bullion. While a newspaper or TV ad offering buyers rare coins shouldn’t be seen as a scam, it is a niche market.

3) Don’t be shy in shopping around

Compare prices online and check the reputation of dealers. You should Google the spot price of gold which gives you an idea of the different offers and how close they come to this benchmark. But bear in mind that prices fluctuate.

4) Don’t get trapped

Make sure you can sell quickly when the time comes. When you need to sell gold, you need to be able to get out as easily as you got in. Also don’t get emotionally attached to the precious metal as you may need to cut your losses or take profit at speed.

5) Avoid keeping it at home

You risk invalidating your insurance. Where possible, use specialist vaults to save on costs as physical gold comes with risk and hassle.

Research suggests that most home insurance policies would be invalidated if you have just two one-ounce gold coins (gold bullion is currently trading above £1,500 per ounce).

Some insurers might want you to have a safe in your home for storage and you could end up having to pay a premium so it’s not as simple as buying and storing it in your property. With gold you need to have liquidity so there’s also no point burying it at the end of your garden – people don’t buy gold to hold forever.