On 8th of March, 2024, gold prices soared to a record high, driven by anticipation of monetary easing in the U.S. and ongoing geopolitical tensions. This surge attracted momentum-driven funds, potentially setting the stage for further increases in the value of this precious metal.
The broader, robust fundamental factors supporting gold include:
- Strong physical demand from Asia.
- Consistent purchases by central banks.
- Gold’s enduring appeal as a haven during times of uncertainty.
Central banks have increased their gold reserves for eight months, underscoring their confidence in the metal as a key asset.
By the afternoon in Greenwich Mean Time (GMT), spot gold had risen and having hit an all-time high of $2,250.15Â earlier.
Looking ahead, analysts from HSBC suggest that the rally in gold prices is set to continue despite facing headwinds from higher yields. They predict that gold is on track to set new record highs, although they caution that its current rally might be reaching its peak. The analysts also highlight that geopolitical events and market uncertainties underpin gold’s value. However, they expect physical demand for gold may soon decline.
Citi analysts, meanwhile, express a medium-term bullish outlook on bullion, estimating a 25% chance that gold could average a record price of $2,300 per ounce in the latter half of 2024. They even propose a low-probability scenario where gold prices could skyrocket to $3,000/oz within the next 12 to 16 months.
Citi points out that as gold trading transitions from Comex and ETFs to over-the-counter (OTC) markets and net long positions remain subdued, there’s significant potential for a rally once prices stabilize. If the recent surge in gold prices continues, it could lead to an even more optimistic forecast for record gold prices in 2024.
Analysts at GoldPriceForecast strike a more cautious tone, noting that gold’s performance in election years tends to be mixed, implying that predicting its future performance comes with uncertainties.
UBS analysts have also weighed in with their projections for gold in 2024, asserting that demand for the yellow metal remains strong in the face of interest rate adjustments. They maintain their gold price forecast at $2,050 per ounce for the end of June and $2,250 per ounce by the end of 2024, and they have introduced a new target of $2,250 per ounce by the end of March 2025. UBS emphasizes gold’s attractiveness as a standalone investment and a hedge within investment portfolios against potential risk events.
In summary, gold’s recent record-setting performance reflects a complex interplay of economic and geopolitical factors. With expert analyses suggesting a variety of potential trajectories for gold prices in the near to medium term, investors and analysts alike will be closely monitoring these developments to gauge gold’s role as a key asset in uncertain times.
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