Gold has seen stellar performance over the course of 2024 — having been on quite the reliable uptrend until late October when prices clashed with resistance and receded.
On January 1, one ounce of the precious metal was trading at approximately $2,062 — prices reached a yearly high of 2,788 on October 25, equating to a 35.20% surge. Since then, the price of the commodity has retreated to $2,611 per ounce — and year-to-date (YTD) returns stand at a still impressive 26.55%.
Since July, gold prices have continually breached new all-time highs (ATHs). While momentum has somewhat weakened in the past two months, on account of lessened political uncertainty in the United States, coupled with a stronger dollar, it’s quite possible that this is just a temporary speedbump.
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With global political tensions showing little signs of improvement, and severe inflationary pressure still in fresh memory, gold’s dual appeal — as an asset that has netted outsized returns in recent times as well as a store of value, remains intact.
The next milestone price point is $3,000 — the question on the minds of investors is whether or not the rally can recuperate and continue with enough vigor to breach that point. Let’s take a closer look at the hypotheticals.
Gold would have to perform admirably in 2025 to reach $3,000 — but in line with recent years
It might seem like an imposing figure but ultimately, Gold’s chances of reaching a spot price of $3,000 are quite high. In fact, it might happen sooner rather than later: for the precious metal to reach that mark, it would have to see prices rally by 14.89%.
As previously mentioned, over the course of 2024, the yellow-hued metal has managed to provide a return of 26.62%, with prices reaching points that equated to as much as 35.20% in returns at times.
In comparison, 14.89% seems quite achievable — a fact echoed by major Wall Street players such as Goldman Sachs (NYSE: GS) — but as is often mentioned (and often forgotten), past performance is not a guarantee of future results.
While 2023 saw an annual return of 13.5%, and 2024 is set to close with returns between 25% and 30%, it’s prudent to remember that gold saw negative returns as recently as 2022 and 2021, when it notched a 0.5% and 5.9% loss, respectively.
There is widespread uncertainty regarding the direction major economies will take — as in the case of Donald Trump’s proposed tariffs. Coupled with that, global geopolitical tensions are seemingly on the rise, and central banks are continually amassing ever-greater reserves of gold. The answer to the question being posed would appear to be that the glimmering store of value can in fact reach a price of $3,000 per ounce in 2025 — and will quite likely do so.
Featured image via Shutterstock
