As the global economic landscape becomes increasingly uncertain, gold has emerged as a go-to asset for investors seeking stability. Since March, the price of gold has steadily climbed, driven by high inflation, elevated interest rates, and the anticipation of a volatile presidential election. This surge in gold prices has captured the attention of many, pushing the precious metal past $2,500 per ounce in August, a record high.
Sean Mason, an investment advisor representative with Fresno Financial Advisors, highlights gold’s role as a protective asset during periods of economic uncertainty. “During times of uncertainty, gold can serve as a safe haven,” Mason explains. This perception of gold as a reliable store of value has led to increased investment, contributing to its recent price surge.
Despite a recent cooling in inflation and expectations of a rate cut by the Federal Reserve, most experts agree that gold’s upward trajectory is far from over. We expect the demand for gold to remain strong as investors continue to seek refuge from economic turbulence.
Several key factors are likely to sustain the high demand for gold in the coming months. Growing concerns about the geopolitical landscape, domestic unrest related to the upcoming presidential election, and heightened anxiety in a challenging economic environment all contribute to a backdrop that encourages investment in gold. Mason notes that these concerns are driving consumers to seek safety in assets like gold, which historically performs well in uncertain times.
Keith Weiner, founder and CEO of Monetary Metals, adds that the weakness in paper currencies is another major factor fuelling gold’s rise. “As people lose confidence in the stability of their national currencies, they turn to gold as a hedge against currency debasement,” Weiner says. This trend, driven by fears of currency devaluation, reinforces gold’s appeal as a safe-haven asset.
Even as gold has reached record highs this year, experts believe the metal’s upward momentum will continue. Nick Fulton, managing partner of USA Pawn Stores of Mississippi, has observed a growing interest in gold, even among those who have never invested in it before. “People who have never owned gold are walking into our shops and buying for the first time,” Fulton shares.
Fulton predicted earlier in the year that gold would hit $2,500 by December 2024. However, with gold already surpassing that mark in August, it appears the metal’s rise is outpacing even the most optimistic forecasts. Weiner echoes this sentiment, suggesting that we are still in the early stages of a significant gold bull market, with prices likely to continue climbing as paper currencies weaken.
Looking ahead, experts have varying predictions for how high gold could climb. Morningstar projects that gold could reach $2,600 per ounce by 2025. However, Weiner believes that if we consider the current supply and demand, gold’s price could go even higher. “Our model suggests that if we strip out the impact of leveraged futures market speculation, gold’s price should be around $2,800,” he explains.
James Cordier, CEO and head trader at Alternative Options, offers an even more bullish outlook, projecting that gold prices could reach $3,000 by the end of the year. He attributes this potential rise in part to the likelihood of a Federal Reserve rate cut, which could weaken the U.S. dollar and drive gold prices even higher.
For those looking to capitalise on gold’s price growth, there are multiple avenues to explore. Investors can purchase physical gold, such as coins and bars, open a gold IRA, invest in gold stocks and ETFs, or trade gold futures. However, it’s crucial to consult with a financial advisor or investment professional to determine the best strategy for your individual financial goals.
As gold continues to shine in an uncertain economic environment, it remains a valuable asset for those seeking stability and long-term growth. With prices expected to climb further, now may be the time to consider adding gold to your investment portfolio.
