Gold Surges to $2,700, Beats S&P 500

Gold prices hit a new all-time high of $2,706 per ounce in futures trading on Thursday, reinforcing the belief among bullish investors that the rally still has momentum. Spot gold also surged, crossing above $2,690 per ounce.

So far in 2024, gold has gained over 30%, outperforming the S&P 500’s 22% increase and securing its place as one of the top-performing commodities this year.

Central Banks Drive Gold Demand as Fed Rate Cuts Boost Momentum

In recent years, central banks have significantly increased their gold reserves, with purchases in the first quarter of 2024 reaching record levels compared to the same period last year.

The Federal Reserve’s shift toward lowering interest rates has further fueled gold's rise in recent months, as the metal becomes more attractive in a low-yield environment. Since gold doesn’t generate interest, it tends to perform well when rates drop.

“Investor demand here in the U.S. still has room to grow,” said Alex Ebkarian, COO and co-founder of Allegiance Gold, hinting at the untapped potential from private investors.

Goldman Sachs Raises Gold Price Forecast to $2,900 Amid ETF Demand and Rate Cuts

Goldman Sachs analysts recently highlighted that the gold market has yet to fully reflect the growing investments in Western physically-backed gold ETFs, which tend to increase gradually over time.

The investment bank raised its gold price forecast from $2,700 to $2,900 per ounce by early 2025, citing expectations of quicker interest rate cuts in both Western economies and China.

Goldman also predicts that central banks will continue their elevated gold purchases, providing long-term support for the metal’s value.

Disclaimer: The information provided in this article is for informational and educational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and the views expressed herein are solely my own. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.