Gold has been in a prolonged bull run for quite a while now — however, the last two years have been particularly beneficial in terms of returns.
This positive price action has been driven by two key catalysts — economic and geopolitical uncertainty have caused renewed interest in gold as a hedge against inflation and a store of value — while outsized returns have positioned it as an attractive speculative investment.
At press time, the spot price of an ounce of the precious metal was $2,682, putting year-to-date (YTD) returns at 30.04%.
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Over the course of the last six months, gold prices have increased by 16.43% — although momentum has weakened significantly, as the yellow-hued metal has reached extremely overbought levels, and has marked a paltry gain of just 2.35% on the monthly chart.
However, the underlying positive catalysts have not shifted at all — if anything, they’ve become more pronounced and relevant. Trump’s proposed tariff plans could significantly increase inflation — which is already ticking higher than expected.
Elsewhere, ongoing tensions between China and the United States, the war in Ukraine, regime change in Syria, and the ongoing onslaught in Gaza — as terrible as they are, only serve to increase the appeal of gold as a safe haven asset.
The gleaming metal, already on track for its best annual returns since 1979, is generally seen in a positive light by analysts — who largely agree that it is back on track to reach a price of $3,000 per ounce With all of this in mind, Finbold has consulted OpenAI’s most advanced large language model, ChatGPT-4o, for additional clarity as to how gold’s price could change in in the short timeframe before we enter into 2025.
ChatGPT outlines bullish and bearish factors at play for gold
On the bullish side of the aisle, the AI model reflected on the accelerated acquisition of gold by central banks across the world — highlighting India, Turkey, and Russia as examples. In addition, the weakening of bond yields in the United States and instability in emerging markets were noted as points that could make gold a more attractive safe-haven asset going forward.
Lastly, strong capital inflows to gold-backed exchange-traded funds (ETFs) was outlined as a bullish sign, particularly as this fact also bolsters the scarcity of physical gold, thereby potentially further increasing prices.
In contrast, ChatGPT opined that the unexpectedly strong recovery of the U.S. dollar, which increases the cost of purchasing gold for foreign buyers, could prove to be a crucial bearish factor. In tandem, gold’s remarkable performance has made it a prime target for profit-taking on a massive scale — and if it comes to that, selling pressure would increase significantly.
Finally, the large language model echoed our earlier sentiments — stating that geopolitical de-escalation in any of the aforementioned hotspots or interest rate surprises could make the precious metal a less attractive investment option.
ChatGPT sets gold price target for the end of 2024
With all of the factors outlined above in mind, the large language model set two price targets — one assuming a bullish scenario, and the other in which bearish factors prevail.
In the first case, ChatGPT expects to see prices reach prices in the $2,780 to $2,800 range, assuming that tailwinds from global conflict, ETF inflows, and weakening bond yields continue.
On the other hand, profit-taking on a massive scale, a strong U.S. dollar, and a more calm global stage could see gold prices dip to $2,600 to $2,620 per ounce.
The bullish price targets represent an upside of 3.66% to 4.40% — conversely, the bearish price targets would see prices decrease by 2.31% to 3.06%.
Featured image via Shutterstock
