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Up and up
Spot gold (XAUUSD:CUR) is getting shinier by the day. The price of the precious metal touched another record, maintaining its streak of successive all-time highs. Since the start of 2024, gold's value has risen by a third, hovering over the $2,700 per ounce mark in October. The simmering tensions in the Middle East and the uncertainty over the upcoming presidential elections in the U.S. have increased the demand for the safe haven asset.
Golden opportunity: 2024 gains have come to fruition after years of lackluster performance over the past decade. The price of the bullion touched about $1,900 in 2011 and had been trading at around the same price for much of 2023. After being subdued for so long, gold prices shot up, delivering a 70% jump in the past two years. What's more is that big banks see this rally continuing into 2025. Analysts at Citi raised their three-month forecast for gold prices to $2,800/oz and set a $3,000 forecast for the next 6–12 months. J.P. Morgan, too, has noted that gold's fundamental price drivers still appear to have upside.
Uncertainty fueling the rally? While the current geopolitical situation and U.S. elections are influencing gold prices, Citi's latest estimates note a possible further U.S. labor market deterioration and interest rate cuts by the Federal Reserve raising bullion prices. On the demand side, central banks in emerging Asian economies have stepped up their purchases in recent years. Investors are also investing in gold, eyeing the growing government debt level in Western countries, as well as sanctions making nations wary of the U.S. dollar.
Boost to miners: Investor fervor into gold has also spilled into equities, with precious metal stocks hitting 52-week highs. This included Agnico Eagle Mines (AEM), Alamos Gold (AGI), ASA Gold (ASA), Barrick Gold (GOLD), DRDGold (DRD), Eldorado Gold (EGO), Endeavour Silver (EXK), among others. "Mining stocks typically outperform gold during bull markets, providing additional leverage and profit potential for investors in precious metals," said SA analyst Jon Wolfenbarger. "Rising costs for mining companies have been a key driver of why mining stocks have underperformed," commented SA analyst Jason Hamlin.
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Today's Markets
In Asia, Japan -1.4%. Hong Kong +0.1%. China +0.5%. India -1.2%.
In Europe, at midday, London -0.8%. Paris -0.8%. Frankfurt -0.4%.
Futures at 7:00, Dow -0.4%. S&P -0.5%. Nasdaq -0.6%. Crude +1.1% to $70.78. Gold +0.5% to $2,752.20. Bitcoin -1.7% to $67,160.
Ten-year Treasury Yield unchanged at 4.21%.
Today's Economic Calendar
10:00 AM Fed's Harker Speech
10:00 AM Richmond Fed Mfg. Index
11:00 AM Treasury Buyback Announcement (Preliminary)
01:00 PM Money Supply
Companies reporting earnings today »
