Both gold and silver strengthened their performance during the first nine months of this year, driven by several factors that pushed the yellow metal to record unprecedented historical peaks, in addition to the prices of silver contracts.
A survey conducted by the Anatolia Agency, based on historical data for gold contracts, shows that the prices of the yellow metal increased by 27.5% during the first nine months of this year compared to the numbers for the end of 2023.
Spot gold contracts reached $2,659 per ounce at the end of the September 30 session, which is close to the historic peak recorded at the end of the September 26 session of $2,682 per ounce.
The rise in gold prices comes primarily as global central banks continue to rush to buy the precious metal, amid fears of accelerating inflation and geopolitical tensions.
Also, the US Federal Reserve (central bank) announcement of the start of monetary easing or lowering interest rates led to support for gold contracts, which are moving contrary to interest rates under normal circumstances.
On September 18, the US Federal Reserve announced a reduction in interest rates by 50 basis points, with two meetings remaining before 2025, amid expectations of at least an additional reduction.
Central bank purchases
In the total of the first half of 2024, the world’s central banks bought 483 tons of gold, which is the highest level ever in that period, according to data from the World Gold Council.
Central banks around the world were stockpiling their gold reserves at record levels in 2024, in an effort to store valuable assets.
Purchases for the first half of 2024 are 5% higher than the previous record of 460 tons, which was recorded in the first half of 2023.
Beijing’s appetite for buying gold has continued since the beginning of 2023, as the People’s Bank of China continued its purchases for the 18th consecutive month last April, raising its total possession of gold to 2,264.3 tons.
On Monday, Goldman Sachs raised its forecast for the price of gold in early 2025 to $2,900 per ounce from $2,700, citing faster declines in short-term interest rates in the West and China and strong purchases from central banks.
Goldman Sachs said in a research note, “We reaffirm our recommendation to buy gold for a long period, due to the gradual support resulting from low global interest rates, high demand from central banks, and the gains provided by resorting to hedging in gold in the face of geopolitical and financial risks and recession.”
Silver
As for silver, its prices rose during the first nine months of this year by more than 37% compared to the figures for the end of 2023, recording $33.5 per ounce.
On September 24, 2024, silver confirmed its ability to reach the global investment banks’ price target of $34.7, amid expectations that it would reach $50 by the first half of 2025.
According to a research note by Investing Heaven, a specialized investment firm, the price of $34.70 per ounce is a no-brainer target in 2024.
The memo indicated, “Our second upward target is $37.70, then we expect a rapid rise between $48 and $50, to be reached in the period from April to June 2025.”
Wall Street
As for Wall Street, the broader US Standard & Poor’s 500 index rose by 20.8% during the first nine months of 2024, but it remains less profitable for investors in the gold market.
But this index achieved its strongest start since 1997, according to FactSet, a company specializing in tracking global stock indices, when the American economy was on the rise during the dot-com boom during the era of President Bill Clinton.
As for the US Dow Jones Industrial Average, it grew by 11.8% during the first nine months of this year, while the Nasdaq 100 index grew by 19.5% during the same period.
