Gold prices close year at all-time high, rising 27% in 2024

Gold prices reached a record high of $2,790 per ounce in October, marking a significant surge of over 27% in 2024. The precious metal continues to stand out as a strong performer, with new records anticipated ahead of 2025 amid robust demand projected to persist into the coming year.

Gold ended last year around $2,062 and was trading at $2,620 as of Wednesday, an increase of 27%, while the performance of these prices marked the best return on gold since 2010.

Gold broke records 40 times on an annual basis as total demand exceeded $100 billion for the first time in the third quarter of 2024. Having risen to an all-time high in October, the ounce price ended the month at $2,743, up 4.15%.

Central banks drive strong demand, boosting gold prices

Experts attribute the rise in gold prices to ongoing geopolitical tensions and political uncertainties, which continue to drive demand for the precious metal.

The ongoing wars in Ukraine and Palestine as well as tensions with Iran caused an upward trend in gold demand. Political uncertainties before and after the U.S. presidential election in November also pushed gold prices upward, while strong demand in Asia contributed to the price hikes.

Ewa Manthey, commodities strategist at ING, said that the general bull market outlook and safe-haven feature of gold and central bank purchases will carry gold to even higher records in 2025.

“The inflationary impact of (U.S. President-elect Donald) Trump’s policies could lead to fewer (interest) rate cuts than previously expected,” she noted.

Manthey said that central banks continued to increase their gold reserves despite a slowdown in the third quarter. “It is now looking likely that the full-year total will fall short of that seen over the previous two years. Looking ahead into next year, we expect central banks to remain buyers due to geopolitical tensions and the economic climate,” she said.

Manthey highlighted that she expects the positive momentum of gold to continue in the short and medium term.

“The macro backdrop will likely remain favorable for the precious metal as interest rates decline and foreign-reserve diversification continues amid geopolitical tensions, creating a perfect storm for gold,” she said.

She emphasized that Trump’s protectionist policies, tariffs and immigration control could create further inflationary pressure, limiting the Federal Reserve’s rate cuts, while a stronger dollar and tighter monetary policy could provide some resistance to gold, estimating an average price of $2,760 per ounce next year.

‘Asian markets to play a pivotal role in gold prices’

A recent report by the World Gold Council said that demand for gold rose on risks and volatility.

Juan Carlos Artigas, global head of research at the World Gold Council, stated that ongoing geopolitical uncertainties worldwide could create favorable conditions for gold prices to rise further next year.

“For gold, 2025 will be a tale of two halves. First, we may experience more risk-on appetite as we wait for strategic and tactical drivers to unravel, leading to more clarity and direction for gold’s performance later in the year,” he said.

“This could really ring true if there is a significant drop in interest rates or a marked increase in market volatility to further fuel investor interest. We also expect global central bank demand and Asian markets to continue playing a pivotal role,” he added.