Gold Rush Expected to Continue Through 2024, $3,000 Mark May Remain Elusive, Reports Reuters

By Brijesh Patel and Ashitha Shivaprasad

SINGAPORE (Reuters) – Gold’s rapid ascent to record highs is expected to persist into the second half of 2024, fueled by strong fundamentals, although achieving the $3,000 per ounce mark may be challenging, according to traders and industry experts.

A significant influx of investors has turned to gold, spurred by anticipated monetary easing, geopolitical tensions in Europe and the Middle East, and particularly notable central bank purchases, especially from China.

Currently, gold is trading around $2,300 per ounce, following a peak of $2,449.89 on May 20, marking an increase of over 11% this year.

"There are many factors propelling gold right now, with one of the main influences being China," said Ruth Crowell, CEO of the London Bullion Market Association, during the Asia Pacific Precious Metals conference in Singapore.

"Normally, China and Japan have been cautious buyers, but given current economic challenges, real estate issues, and fluctuations in equity markets, gold is increasingly viewed as a secure investment… I believe gold will remain attractive for a considerable time."

Globally, central banks, especially in China, have been bolstering their gold reserves in light of currency depreciation and various geopolitical and economic uncertainties. Gold is traditionally regarded as a reliable hedge against such risks, thriving particularly in low-interest rate environments.

"Physical demand for gold remains robust, but we are yet to see significant retail investment interest, like in exchange-traded funds or demand from the U.S. market… I foresee prices easily hitting $2,600 to $2,700 this year," stated Amar Singh, Head of Metals – Asia Pacific and the Middle East at StoneX.

With investors seeking insight into the timing of interest rate reductions from the Federal Reserve, the upcoming U.S. elections in November are likely to introduce additional volatility into the market, analysts cautioned.

While optimism for gold remains prevalent among most analysts and traders, the prospect of the metal exceeding $3,000 per ounce seems unlikely at the moment.

"It’s not that a specific factor is holding gold back, but reaching $3,000 would necessitate a 30% increase from here, which is substantial, especially after the considerable gains we’ve already seen," remarked Nikos Kavalis, managing director of Metals Focus.

SILVER’S PERFORMANCE

Silver, valued both as an investment and an industrial metal used in electronics and solar technology, has seen a favorable performance, benefiting from gold’s strength and solid physical demand.

The metal was priced at $29.20 per ounce, nearing an 11-year peak reached in May.

"The outlook for silver is promising, particularly regarding its role in the green energy transition. Additionally, there is still potential for gold prices to rise further, which will likely boost silver prices as well," noted Michael DiRienzo, president and CEO of The Silver Institute.

In India, silver imports in the first four months of the year have already exceeded the total amount for all of 2023, driven by increasing demand from the solar panel sector and investors expecting silver to outperform gold, according to government and industry officials.

Research conducted by Metals Focus for The Silver Institute indicates that the silver market is currently in its fourth consecutive year of structural deficit, anticipating a rise in industrial demand.