26 March 2024
The price of gold climbed to a new all-time record high in March.
Voracious buying from Chinese citizens and expectations for Federal Reserve interest rate cuts in the back half of the year helped fuel the latest run-up in gold. Also, investors around the globe continue to pile into safe-haven assets like precious metals to protect themselves in a world increasingly filled with military turmoil, economic instability and political uncertainty.
Gold extends its record run.
Gold traded to a new all-time high at $2,222 on March 21. That extends a remarkable 16-month climb in the precious metal, which has surged 30% from just above $1,600 in late 2022.
Gold flows east.
While the U.S. may actually dodge an economic recession, the Chinese economy is turning south. Real estate and stock markets have tumbled in China, triggering concerns that a full-blown commercial real estate crisis could develop and weigh down the broader economy.
In January, about half of all gold shipments were delivered to Hong Kong and mainland China, according to UBS. Chinese citizens are pouring their money into gold as a safe haven investment amid the increasing economic uncertainty there.
Geopolitical instability creates another demand stream.
Here in the U.S., investors are piling into gold to help protect and grow their portfolios amid the ongoing geopolitical instability including the Russian war in Ukraine and the Israel-Hamas war.
Domestic politics are heating up as the upcoming U.S. presidential election looms large with likely Republican presidential nominee Donald Trump already stating that the voting contest will be rigged.
All these events create economic and political uncertainty and are boosting demand and desire to own precious metal, which has no counter-party or government risk.
Fed rate cuts expected to boost gold.
Peering into the second half of 2024, investors expect the Fed to cut interest rates in the second half of the year, which will boost gold further. As interest rates fall, it reduces competition for non-dividend paying assets like gold.
Wall Street says gold can keep going higher.
Gold, the world’s oldest form of money, just keeps gaining in value—and Wall Street predicts even higher prices are ahead. In an early March research note, Citi called themselves “medium term bullion bulls” and pegged 25% odds that gold will hit a record $2,300 an ounce later in 2024. They reiterated a recent “wildcard” forecast that says gold could hit $3,000 over the next 12 to 16 months.
What about you—do you own enough gold? Don’t get left behind during this historic gold run.
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