April 5

Gold Prices 2024: Breaking Records Amidst Global Uncertainty

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Here’s a quick Spring 2024 gold price update:

The yellow metal is on fire. 

Frankly, we could end the article here. There’s no other way around it. In March alone, prices soared, breaking record after record after gaining 9%, achieving its best month since July 2020 and marking back-to-back quarterly gains. 

Better yet? According to MKS PAMP, its floor, aka worst-case scenario, is now at $2,000 an ounce. It's easy to see why, especially if you’ve watched the news. Pick your catalyst- interest rate cuts, still-sticky inflation, central bank shopping sprees, or the potential for World War III. 

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Economic Catalysts Driving Gold's Ascent

First, let’s unpack the economic catalysts pushing gold’s bull market, which shows no signs of stopping.   

The Role of US Monetary Policy

The correlation remains tried and true: as monetary policy softens, gold's appeal strengthens. That’s why, as Federal Reserve Governor Christopher Waller and Chair Jerome Powell continue to drop nuggets about the possibility of easing rates "at some point this year," gold bulls buzz with optimism. Odds from the CME's FedWatch tool favoring a rate cut in June at 64% only add to the hype. 

Then, on the inflation front, gold's price tells its own story, seemingly unfazed by the typical economic indicators. With the latest US core personal consumption expenditure (PCE) price index rising 0.3% in line with expectations, there's a growing acceptance that the Fed might embrace inflation "higher for longer" and pivot its macroeconomic strategy towards easing; good news for gold. 

Related: Diversify Your 401(k) with Physical Gold and Silver

From the USD to Beijing: The Other Economic Catalysts Driving Gold Higher

Two other economic catalysts continue pushing gold to all-time highs, with many experts seeing this trend continuing

First is gold's relationship with the U.S. dollar. It’s straightforward: with the Fed poised to pivot, the dollar is weakening, and as its value goes down, gold often goes up. Gold has been a store of value for millennia, and many find it an attractive option to protect against currency debasement.  

Significant purchases from central banks, particularly China, which has been aggressively buying gold, are further pushing gold prices higher.

In the early months of 2024 alone, China added 10 tons to its reserves in January and 12 in February, signaling not just a national but a global shift towards valuing gold as a key financial asset, with central banks poised to continue their gold shopping spree until at least June.  

Geopolitical Catalysts Elevating Gold Prices

Now, let’s shift the focus to geopolitics. It’s almost as if the more ominous and depressing the news gets, the more appealing gold becomes.  

From Battlefields to Bullion: How Geopolitics Contribute to Gold’s Surge 

The drumbeats of war in Ukraine and the Middle East are not just reshaping borders and lives but also driving investors toward the age-old sanctuary of gold. 

The conflict in Ukraine is over 2 years old now and shows no signs of stopping. With its grim tally of attacks and the potential for Russia to mobilize 300,000 more troops by June, it paints a picture of a nation bracing for more hardship.

Simultaneously, the strife across Israel, Gaza, Lebanon, Syria, and the Red Sea deepens, with Hamas and Israel still far apart in ceasefire talks. The stakes are exceptionally high with Iran potentially preparing to directly retaliate against Israel for recent strikes in Syria that killed 2 of its generals and 5 other senior commanders.

Will tough talk turn into action that threatens to escalate into a broader regional conflict, or worse, a world war? All we know is the region is a vortex of violence that could spiral out of control at any moment.  

Perhaps that’s why Fitch Ratings expects the “geopolitical price premium” on commodities to continue. 

Related: Free Guide - How to Buy Physical Gold and Silver (Tax-Free)

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The Dynamics of De-Dollarization

Another quiet but significant geopolitical shift is contributing to gold’s surge: de-dollarization. De-dollarization is a trend of countries gradually stepping back from the dependence and dominance of the dollar due to a mix of political tensions and the rise of powerful economic alliances.

From Russia's strategic move to ditch the dollar in its wealth fund as a defense against sanctions to the emerging partnership between Iran and Russia and the ambitious plans of the BRICS nations, a clear trend forms well beyond dollars, cents, currencies, and exchange rates.

It has a deeper meaning related to stability, alternatives to the status quo, and a direct threat to the world’s reserve currency, making gold's appeal grow.

Where Does Gold Go From Here?

Gold's road higher continues to captivate investors and analysts alike, with prices exceeding $2,250 an ounce and notching record after record after record.

With the economic and geopolitical catalysts going nowhere anytime soon, gold's path forward seems not just a question of "if" but "how high." Some experts believe that gold prices will hold steady in the near term. Others are even more bullish, with some predictions calling for gold to reach $2,300 an ounce in weeks or $7,000 an ounce by 2030. 

From JPMorgan's steady quarter-over-quarter growth forecasts to Charlie Morris's bold claim of gold as the century's leading asset class, optimism runs high.

Echoing this sentiment, Jim Puplava points to a significant bull market on the horizon, fueled by demographic changes and globalization. All we know is crazier things have happened, and we live in an increasingly crazy world. 

To learn more about gold and how to diversify your portfolio with physical precious metals, request your free Wealth Protection Kit today.

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About the author 

Robert Samuels

Robert Samuels is a financial copywriter and business advisor. After teaching himself stock market basics and financial fundamentals, he leveraged this newfound passion into a Master’s Degree from Harvard University’s ALM Finance extension program, where he received a 3.87 GPA and Dean’s List distinction.

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