Gold prices have been on the rise, currently reaching $2,642.45 per ounce, with a 45.93 percent increase over the past year and a 6.58 percent increase in the last 30 days. Experts predict that gold could climb to a record $3,000 before the end of 2024, with some even suggesting it could reach this milestone in just a 30-day time span. The surge in gold prices can be attributed to various factors, such as newly lowered interest rates from the Federal Reserve, increased investor attraction, and ongoing geopolitical conflicts, which lead investors towards safe-haven assets like gold.
Geopolitical conflicts, especially in the Middle East, have contributed to the spike in gold prices, as investors seek out safe-haven assets during times of uncertainty. The ongoing conflicts in Ukraine and tensions in the Middle East have historically coincided with spikes in gold prices, such as during the 1979 Soviet invasion of Afghanistan when gold more than doubled in value. Some experts believe that gold prices could hit $3,000 if Israel conducts retaliatory strikes on Iran, as tension escalates in the region with ballistic missiles being launched at Israel.
In addition to geopolitical factors, new investors and increased buying from eastern central banks like the People’s Bank of China and India have also played a role in driving up gold prices. The PBOC has been buying gold for 18 consecutive months, with its gold reserves rising to $182.98 billion at the end of August. This trend is expected to continue, as bigger banks increase their gold holdings, leading smaller banks and investors alike to follow suit. As more investors enter the market and supply remains limited due to some investors holding onto their gold, prices continue to see upward pressure.
With ongoing conflicts in the Middle East and Ukraine unlikely to be resolved any time soon, experts predict that gold prices will remain on an upward trajectory. Inflation easing but still present, along with the potential for more rate cuts, suggest a positive outlook for gold for the remainder of 2024. Some experts even believe that the days of sub-$2,000 gold prices are behind us, with gold likely to remain at a high value for the foreseeable future. As long as geopolitical tensions persist and the possibility of high inflation looms, gold is expected to perform well as a safe-haven investment.
