In 2024, precious metals have performed strongly in the global commodities market, with the London spot gold price rising in 8 of the first 11 months. The monthly changes in gold prices were as follows: -1.14%, 0.23%, 9.28%, 2.34%, 1.8%, -0.04%, 5.2%, 2.29%, 5.24%, 4.15%, and -3.4%, accumulating an overall increase of over 25%.
While gold prices have generally increased in 2024, there has been a recent decline. As of early December, London spot gold was priced at $2,624.19 per ounce, down more than 6% from its peak of $2,790.07 per ounce at the end of October. According to the head of Guo Xin Futures, the decline is influenced by a reduction in global uncertainties, a decrease in market risk premiums, and the US dollar index reaching a one-year high, all of which have caused gold to enter an adjustment period.
Industry experts are optimistic about the future of gold prices. The head of Guo Xin Futures noted that in 2025, precious metal prices will be influenced by factors such as Federal Reserve monetary policy, global economic growth expectations, and geopolitical conditions. A possible interest rate cut by the Federal Reserve could support gold prices, although the extent and timing remain uncertain. Despite the challenges posed by a stronger US dollar since November 2024, concerns over trade protectionism, deglobalization, a high US dollar index, and capital outflows from emerging markets have increased the risk premium for precious metals. Geopolitical tensions have not eased, and experts recommend maintaining a bullish strategy.
Wang Yanqing, an analyst at CITIC Securities Futures, emphasized that an “unprecedented century transformation” is taking place, with the US dollar’s role as the dominant global currency being challenged. With the US government’s massive debt, escalating geopolitical tensions, and inflationary threats from “de-globalization,” gold prices may rise to new historical highs. Currently, we are at the beginning of the third major bull market for gold, and its long-term upward trend is expected to continue.
Looking ahead, the precious metals market is expected to show strong performance, especially with gold’s overall upward trend, creating optimistic expectations for investors. While there has been a recent pullback in gold prices, industry experts generally view this as a short-term fluctuation. Long-term, gold prices are expected to continue climbing due to various macroeconomic factors. As the global economic landscape undergoes profound changes, gold’s status as a safe-haven asset becomes increasingly important,
highlighting its investment value. However, investors should closely monitor the gold market’s movements to mitigate potential losses.
