Gold has seen a significant rise of 23% since the start of 2024, with its price currently hovering at an all-time high of around €2,260. This surge can be attributed to several factors, including ongoing geopolitical tensions, substantial purchases by central banks, and the weakening of the dollar, all of which reaffirm gold’s status as a reliable safe-haven asset during times of economic uncertainty.
Tuesday’s market rally was driven by optimism surrounding potential interest rate cuts by the Federal Reserve. As investors await the upcoming US payrolls report, gold remains steady at its elevated price level. Central banks have continued their buying spree, purchasing over 1,000 tonnes of gold in 2023 alone, which set a new record. These purchases, combined with the weak dollar, have been instrumental in pushing the metal’s value to record highs. Gold’s performance has outpaced major stock indices, such as the S&P 500, which has risen by 17%, underscoring its growing appeal over recent years.
Looking ahead, the broader financial market sentiment remains positive, with factors such as a weak dollar, potential rate cuts, and declining US Treasury yields creating a favourable environment for gold’s continued demand. Goldman Sachs has highlighted gold’s strong near-term potential, citing its role as a preferred hedge against risk. However, the bank has adjusted its price forecast slightly, now predicting gold to reach $2,700 (€2,444) by early 2025 instead of late 2024, in part due to weaker demand from China.
In contrast to the challenges faced by other commodities, gold remains supported by robust central bank demand. In the first half of 2024 alone, central banks bought a record-breaking 483 tonnes of gold, further boosting its value. This sustained demand, coupled with the current global economic conditions, suggests that gold will continue to hold its position as a safe-haven asset in the coming months.
Gold’s impressive performance in 2024 and its ability to retain value amidst global uncertainty demonstrate that it remains a strong option for those seeking a secure investment.
London-listed company KEFI Gold and Copper plc (LON:KEFI) is an exploration and development company focused on gold and copper deposits in the highly prospective Arabian-Nubian Shield. The Company operates in Ethiopia and Saudi Arabia with projects including Tulu Kapi project, Jibal Qutman EL and Hawiah.
