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Gold Outlook: Visual Analysis of Price and Market Trends

06 November 2024

Read Time 2 MIN

In this chart book, we explore the trends driving gold’s 2024 outperformance and explain why the asset class is well-positioned to continue its strong run.

Gold and gold stocks have been among the strongest performing asset classes thus far this year, even outperforming US stocks. Gold stands well-positioned to continue its upward trajectory, with appeal for investors seeking both a safe haven and potential growth. A range of macroeconomic factors have aligned to set the stage for continued gold strength:

  • Geopolitical tensions: Rising global conflicts have heightened market risks, driving investors toward safe-haven assets like gold.
  • Expected rate cuts: Anticipated interest rate cuts in 2024 and 2025 could weaken the dollar, bolstering demand for gold.
  • Persistent inflation: Sticky inflation and concerns over a potential “second wave” sustain the value of gold as a hedge.
  • Strong central bank demand: Central banks, especially in emerging markets, continue to build gold reserves.
  • Robust physical demand from Asia: Demand for physical gold (including bars, coins and jewelry) in Asia contributes to price stability.
  • Resurgent Western investment: Renewed interest from Western investors could be a catalyst for gold’s near-term growth.

In our gold chart book, we explore the impact these factors have had on gold and gold stocks, as well as how they shape our outlook for this asset class.

Key Takeaways:

  1. Gold and gold stocks are on pace to be among the top-performing assets in 2024.
  2. Gold’s price momentum, trading at higher ranges, fuels speculation about its potential to reach $3,000 per ounce.
  3. Historically, gold has gained following Fed rate cuts, with cumulative returns averaging 25% over 500 trading days in the last three rate-cut cycles.
  4. Though China’s central bank purchases have recently slowed, China has been instrumental in driving recent price increases, and its actions remain a significant factor.
  5. Major emerging markets, including Russia, India and China, continue to bolster gold reserves, reflecting a possible shift away from reliance on the U.S. dollar.
  6. Central bank gold purchases in 2022 and 2023 have reached levels unseen since 1963, underscoring gold’s role in national reserves.
  7. Investment demand is showing signs of revival as ETF inflows track higher, a trend that could support continued price strength.

Explore our full chart book on gold here: Gold Outlook: Visual Analysis of Price and Market Trends.

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