TLDR:
- Gold prices remain stable around $2,651 per ounce amid rate cut expectations
- Geopolitical tensions, especially in the Middle East, support gold as a safe haven
- Strong US employment data shifts focus to upcoming inflation indicators
- Gold reached a peak of $2,685.69 on September 26, 2024
- Experts predict gold could reach $3,000 per ounce by the end of 2024 or sooner
Gold prices are nearing the $3,000 per ounce milestone, driven by a combination of factors including geopolitical tensions, economic uncertainties, and anticipated changes in monetary policy.
The precious metal’s value has been on an upward trajectory throughout 2024, with several key events contributing to its rise. In March, gold hit $2,070 per ounce, and despite some fluctuations, it has continued to climb. The metal reached a peak of $2,685.69 on September 26, 2024, before experiencing a slight dip.
One of the primary factors supporting gold’s ascent is the ongoing geopolitical turmoil, particularly in the Middle East. The recent escalation of tensions between Israel and Iran has further fueled demand for gold as a safe-haven asset.
Matthew Jones, a precious metals analyst at Solomon Global, suggests that if Israel conducts retaliatory strikes on Iran, gold prices could surge past the $3,000 mark almost immediately.
Economic Factors
Economic factors are playing a crucial role in gold’s price movement. Investors are closely watching the Federal Reserve’s monetary policy decisions, with expectations of potential interest rate cuts in the near future.
The anticipation of rate cuts, coupled with strong US employment data, has shifted market focus to upcoming inflation indicators such as the Consumer Price Index (CPI) and Producer Price Index (PPI).
The demand for gold is not limited to individual investors seeking a safe haven. Central banks, particularly in countries like China and India, have been consistently increasing their gold reserves. The People’s Bank of China, for instance, has reportedly bought gold for 18 consecutive months, with the value of its gold reserves rising to $182.98 billion at the end of August 2024.
Nick Fulton, managing partner at USA Pawn, notes a surge in first-time buyers entering the gold market. This influx of new investors, attracted by the metal’s recent performance, is contributing to the upward pressure on prices.
Despite the strong performance of gold, experts caution that the market remains sensitive to various factors. The upcoming US presidential elections add a layer of uncertainty, while global economic weakness continues to push investors toward safe-haven assets.
However, recent stimulus efforts by China may provide some relief to the world economy and could influence gold prices.
As gold prices approach the $3,000 milestone, some analysts believe this level could be reached by the end of 2024 or even sooner. Luciano Duque, chief investment officer at C3 Bullion, suggests that the sub-$2,000 gold price might become a thing of the past.
The outlook for gold remains positive for the remainder of 2024, with ongoing conflicts and economic uncertainties likely to sustain demand.
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