Gold has had a stellar run in 2024, reflecting the metal’s enduring appeal as a safe haven.
As of October 29, gold is trading at $2,752.48, up a substantial 33.43% year-to-date. The precious metal opened the year trading between $2,056 and $2,078 on January 2, and since then, it has steadily climbed, reaching near its all-time high.
Thus, if you had invested $1,000 in gold at the start of the year, your investment would now be worth approximately $1,334, translating into a $334 gain.
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Gold trading range
Gold’s price opened with positive momentum today, reaching up to $2,758.37 before showing signs of a possible intraday bearish correction. This level—$2,758—is not just a psychological milestone but is also close to gold’s record high.
The expected trading range for the day is between a support level of $2,735 and a resistance level of $2,760. Should gold breach the $2,758.40 mark, it could indicate a continuation of the bullish trend, potentially pushing the price to fresh highs around the $2,782 mark.
Gold near all-time high, but demand signals mixed
As gold flirts with all-time highs, it faces a mixed demand landscape. According to Carsten Fritsch, a commodity analyst at Commerzbank:
“There is further evidence that the high price level is having a visible dampening effect on Gold demand in China.”
Data from the China Gold Association reveals that demand in China dropped 11% year-over-year in the first three quarters of 2024, with jewellery demand suffering a particularly sharp decline of 27.5% to 400 tons.
On the other hand, there is a notable uptick in safe-haven demand.
Fritsch adds: “This reflects demand for Gold as a safe haven and as a store of value.” Specifically, demand for gold bars and coins in China increased by 27%, reaching 283 tons as more investors sought refuge in the asset amid economic uncertainties.
Headwinds in traditional Gold demand
Despite gold’s remarkable performance, traditional demand factors like jewelry purchases appear to be acting as a headwind. According to Fritsch.
“The decline in jewelry demand was disproportionately high at 29%. In addition, demand for bars and coins was also 9% lower than in the previous year,” he notes.
These factors indicate that while gold remains in demand as a safe haven, broader retail demand, especially in the form of jewelry, is facing pressure due to high prices.
This headwind could act as a limiting factor on gold’s upside potential, as demand shifts away from traditional uses. However, with geopolitical uncertainties and inflationary pressures still at play, gold’s role as a store of value continues to shine, keeping its long-term prospects favorable for investors seeking stability.
