Gold Prices Rising Outside of the U.S.

Wells Fargo has noted the strong performance of gold in 2024, as it remains close to record high levels. The bank highlights that gold’s year-to-date gain in USD has outperformed the broader commodity market, driven by robust global demand, central bank purchases, and ongoing geopolitical tensions.

Wells Fargo mentioned, “Gold’s rally has been so powerful that our target range for 2024 of $2,300 to $2,400 has already been achieved, with our 2025 target range of $2,400 to $2,500 just 5% above that.”

Despite maintaining a bullish outlook on gold’s fundamentals, the bank forecasts a potential short-term pullback or stagnation, largely due to fluctuations in currency exchange rates. “Investors have been increasingly asking about our perspective on gold. We remain supportive of gold and believe its fundamental drivers are still strong,” Wells Fargo said. “However, we do think that gold could see a short-term pullback or at best remain range-bound in the coming months.”

Wells Fargo explains that gold becoming expensive for many around the world is a key issue. As gold is traded globally in USD, a rising dollar increases the cost for buyers utilizing weaker currencies. This dynamic accounts for the much stronger increase in gold prices when measured in currencies like the Japanese Yen, which has seen a 26% rise year-to-date compared to USD.

In spite of the possibility of a short-term slowdown, Wells Fargo reaffirms its optimistic long-term outlook for gold, believing that the price range of $2,300 to $2,400 per troy ounce for 2024 and $2,400 to $2,500 for 2025 remains justified.