HomeBusinessGold price rally will continue into 2025

Gold price rally will continue into 2025

Bitcoin’s unfettered rise has captured the attention of many market watchers lately, with the election of Donald Trump to the White House sending the cryptocurrency – and others like it – on a tear.

Bitcoin has risen almost 50 percent since November 3 – the eve of the US elections – while Dogecoin, a so-called “memecoin” that many crypto investors associate with Elon Musk, has more than doubled in the same period.

But despite crypto dominating the column inches, there’s another unconventional asset class that’s had a blistering year: gold.

Prices for the yellow metal have risen by almost 28 percent in British pounds as investors retreat to their traditional safe haven amid an uncertain geopolitical and economic environment.

After changing hands for the year at £1,602 per ounce (/oz), gold hit several all-time highs in 2024 during a bull run that peaked at £2,163/oz in late November before declining to 2,071/oz at the time. of writing.

Such a big jump over the course of the year would typically cause prices to fall again as investors shy away from the higher price; a trend that is partly confirmed by the dip in the asset class over the past month.

But with geopolitics set for another feverish year and inflation appearing to be increasingly entrenched in many Western economies, many investors in the precious metal are predicting another year of gains in 2025.

Performance of gold in 2024 (chart courtesy of the Royal Mint)

“There is no denying that 2024 has been a record year for gold,” said Rick Kanda, president of The Gold Bullion Company. “It has reached colossal new highs and broken records. This is… a result of economic uncertainty, changes in global inflation and also increased demand.”

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Gold has traditionally performed particularly well in times of uncertainty, when investors want to invest less of their portfolio in nervous stock and bond markets.

The consensus view that gold has inherent value – both due to its practical use in jewelry and various tech products, and its historical use as a currency – adds to its appeal when markets are at a fever pitch.

According to Bullion Vault, a British precious metals marketplace, investors don’t foresee this feverish environment going away next year. With a volatile newly elected president gearing up for another term at the helm of the world’s largest economy, several major conflicts heading into the new year and inflationary pressures continuing, Bullion Vault investors are more likely to consolidate their gold holdings than they are to sell. .

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