In a market fraught with volatility, gold has remained a beacon of stability. Prices have consistently stayed above the $2,400 per ounce mark, an impressive feat given the turbulence in other commodities. This remarkable steadiness isn’t random—it’s a reflection of strategic economic and geopolitical dynamics making gold the “go-to” safe-haven asset.
U.S. Dollar Weakness: The USD has slipped to a three-month low, making gold more attractive to international buyers. This decline has boosted demand significantly. But it’s not just the dollar tumble adding shine to gold…
Geopolitical Tensions: From high-drama political events, like the attempts on former President Trump’s life, to the relentless strife in the Middle East and Ukraine, investors are seeking refuge. Political instability continues to drive gold’s appeal as they look for safe harbors in a stormy world.
Central Bank Activity: BRICS Plus nations have been particularly aggressive in their gold purchases, adding to this precious metal’s demand. Central banks globally are hedging against economic instability with strategic gold buys. Remember: when the central banks start stockpiling, you should take notice!
Gold’s price shot higher and beyond record highs due to a confluence of economic and geopolitical issues… Central banks, led by BRICS Plus nations, are buying gold at a faster rate each month.
Alex Ebkarian, COO and co-founder of Allegiance Gold
If the Federal Reserve decides to lower rates… the dollar might weaken, potentially leading to an increase in the relative value of gold. Lower interest rates also enhance the attractiveness of non-interest-bearing assets like gold.
Michael Ashley Schulman, CFA and partner at Running Point Capital Advisors
The environment is strong for gold’s performance… our research indicates that when the U.S. market experiences Fed rate cuts, the gold price has performed favorably.
Joe Cavatoni, Market Strategist, North America, World Gold Council
Across commodities… the only structural bullish call we hold is for gold and silver. Properly timing the business cycle is critical. Gold looks set for a breakout around mid-2024.
Natasha Kaneva & Gregory Shearer, JPMorgan
Short-Term Trends: Expect volatility as tactical players take profits and respond to equity market liquidations. However, the foundation is sturdy. Gold prices should stay solid throughout 2024 and beyond.
Long-Term Trends: Gold’s bull case is intact. With its status as a safe-haven and inflation hedge, analysts foresee gold peaking at $2,300 per ounce by 2025, driven by Fed rate cuts and falling U.S. real yields.
Gold on a tear and hitting $2,483 per ounce recently shows its renewed vigor. Central banks are buying, the dollar is weakening, and geopolitical tensions aren’t going away. It’s essential to consider gold as a hedge, a safeguard against macroeconomic uncertainties. With this kind of solid performance, it’s worth having this precious metal in your portfolio.
Review these key insights before making your next move:
| Index | Date | Gold Price (Per Ounce) | Relevant Events | Comments |
|---|---|---|---|---|
| High | March 2024 | $2,431.29 | Gold rally | Peak boost from March to April rally |
| Recent | July 15, 2024 | $2,411.71 | Steady prices | Prices near historic highs, with moderation |
| Low | April 5, 2024 | — | Gold slip | Bullion hit lowest since April 5 |
| Current | July 20, 2024 | $2,411.71 | Interest rate cuts | Prices stabilized due to US rate-cut optimism |