Quick Bite | Time For Gold

Gold has performed well in 2024, rising by 12% year to date and outpacing most major asset classes. Gold has benefited from continued central bank buying, Asian investment flows, resilient consumer demand, distrust of fiat currencies, and geopolitical uncertainty. The key question on investors’ minds is whether gold’s momentum can continue or if it’s running out of steam?

With a few exceptions, the global economy is showing some slowing down in growth indicators, providing hope for rate cuts amid lower but still uncomfortable inflation. And the market’s outlook is probably similarly waiting for a catalyst – it will largely depend on the trajectory of corporate earnings. Perhaps gold, too, is waiting for a catalyst.

For gold, the catalyst could come from falling rates in developed markets that attract Western investment flows, as well as continued support from global investors looking to hedge risks amid a complacent equity market, persistent geopolitical tensions, and indebted government balance sheets.

Gold’s outlook is, of course, not without risks. A sizable drop in central bank demand or widespread profit-taking from Asian investors could curtail its performance.  

In summary, gold may remain range-bound if current markets prevail. However, there’s a clear path for gold to outperform from here in the event that rates start declining and a recession is avoided.

Gold 10 Year Chart

Source: Trading Economics