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Gold delivered its strongest annual performance since 2010. The metal surged 27% in 2024 to reach record highs of nearly $2,800 per ounce after Trump’s won as POTUS. The rally was also driven by large-scale central bank purchases, Federal Reserve monetary easing, and gold’s status as a safe haven amid geopolitical tensions, including conflicts in Ukraine and the Middle East. According to Bloomberg market analysts, the key factors driving gold’s strong performance in 2024 could stay true deeper into the new year. However, investors are now preparing for the potential economic shifts of Donald Trump’s second term.  Gold value chart since 2000. Source: Bloomberg The new administration’s policies on trade, inflation, and the global economy are expected to play significant roles in shaping market sentiments. This uncertainty has had investors on a new trading path. Traders are buying gold to safeguard their wealth and hedge against possible economic downfalls. Global central bank purchases and 2025 monetary policy  Central banks, particularly in China and other emerging markets, played a significant role in driving gold’s demand last year. Their sustained buying underpinned gold’s rise, complemented by the Federal Reserve’s monetary easing, which made non-yielding assets like gold more appealing to investors. Darwei Kung, head of commodities at DWS Group, sees these trends continuing into 2025. He projects gold prices will hit $2,800 by the end of 2025. Kung noted that gold remains a critical hedge against risks posed by new trade policies under President Donald Trump’s second term, which could escalate trade tensions and increase inflationary pressures. Analysts also noted that key buyers such as China could increase gold purchases during periods of local currency weakness.  The country holds substantial dollar reserves and has a strategic interest in market diversification. They highlighted similar patterns presented during past episodes of yuan depreciation. To…

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Filed under: News - @ January 6, 2025 12:24 pm