Spot gold prices rose by more than 28% since the beginning of this year, until the session of December 31, 2024, driven by increased demand for the precious metal and escalating geopolitical tensions. This annual increase is the largest increase since 2010.
The year 2024 also recorded the highest level of an ounce of gold ever, above $2,830, amid global investment banks’ expectations of further rise in 2025.
Chronological sequence
- Gold witnessed a noticeable rise in 2024, achieving its best annual performance ever, with the price of an ounce during the session of December 31, 2024, reaching about $2,624, according to data from the World Gold Exchange.
- At the beginning of 2024, gold prices were relatively stable, with the price of an ounce reaching $2,044.51 on January 4, before witnessing a successive rise by the middle of this year.
- By September 2024, its average monthly price worldwide had reached $2,570.55 per ounce, reflecting growing investor interest amid global economic uncertainty.
Contributing to the rise in prices of the yellow metal, the US Federal Reserve lowered interest rates for the first time since March 2020 by 50 basis points last September, bringing US interest rates to 5%.
- Last October, gold prices broke records, rising more than 30% in 2024 and reaching an all-time high of $2,830.
- Last November, the US Federal Reserve lowered interest rates for the second time in a row by 25 basis points to settle at 4.75%. This was accompanied by the victory of Republican candidate Donald Trump in the presidential elections, which gave the dollar some strength.
- In December 2024, despite reducing interest rates by 25 basis points to 4.5%, the Fed expected to slow down the reduction in interest rates in 2025, which stopped gold’s rise and shift downwards to stabilize at about $2,623 during the last trading session in 2024, simultaneously With the US dollar index rising to its peak in two years against a basket of currencies.
Why did gold rise to record levels?
Several major factors contributed to the rise in gold prices throughout 2024, most notably:
- Central bank purchases increased their reserves in emerging markets, which provided significant support to the prices of the yellow metal.
- US interest rates were reduced in 3 consecutive meetings, which led to maintaining the consistency of gold price gains during the current year.
- Geopolitical tensions played a role in the yellow metal’s gains, as these risks, especially in the Middle East, and between Russia and Ukraine, prompted investors to search for safety in gold, which led to a further rise in its price.
Gold performance forecast for 2025
Heading into 2025, analysts remain bullish on gold due to favorable fundamentals.
The market is looking forward to the economic data and US policies of President-elect Donald Trump, which are expected to affect gold prices.
Wall Street analysts, especially major financial institutions such as JP Morgan, Goldman Sachs and Citigroup, expect gold prices to reach $3,000 per ounce by the end of 2025.
Goldman Sachs expects gold to rise to $3,000 an ounce by the end of 2025, driven by increasing demand from central banks and investors searching for safe haven assets amid geopolitical tensions.
While Goldman Sachs analysts expect gold prices to approach $3,150 in 2025 and exceed $3,300 in 2026, eventually approaching $5,000 by 2030, in light of long-term market trends and economic factors.
