Markets
Gold prices climbed to successive record highs in 2024, driven by central bank purchases, expectations of monetary easing, and geopolitical uncertainty.
By Glen Elgin Analysis
In 2024, gold prices reached successive record highs, with spot gold trading above USD 2,700 per troy ounce in October 2024, up from approximately USD 2,060 at the start of the year. The rally represented a gain of more than 30% year-to-date and marked the highest nominal price ever recorded for the metal.
Central bank purchasing was a significant driver. According to World Gold Council data, central banks added more than 1,000 tonnes of gold to their reserves in 2023, and the pace of buying continued into 2024. The People's Bank of China reported gold purchases for 18 consecutive months through April 2024, and other central banks in emerging markets also increased their holdings.
Expectations of monetary easing also supported prices. The Federal Reserve delivered a 50-basis-point rate cut on 18 September 2024, its first reduction since 2020. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold. The European Central Bank and Bank of England also moved toward easing in 2024.
Geopolitical uncertainty provided additional support. Ongoing conflicts in the Middle East and Ukraine, combined with uncertainty about the US presidential election in November 2024, increased demand for safe-haven assets. Gold has historically performed well during periods of elevated geopolitical risk.
This analysis notes that while gold can serve as a portfolio diversifier and inflation hedge, it does not generate income and its price can be volatile. Investors considering gold exposure should assess how it fits within their broader asset allocation, risk tolerance, and investment objectives. Physical gold, gold exchange-traded funds, and gold mining equities each carry different risk and return characteristics.
Source: World Gold Council
This article is an original Glen Elgin Investments summary and analysis based on publicly reported facts. It does not reproduce the source article. Glen Elgin Investments is not the original publisher of the underlying news event.
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