Market Insights

Will Gold’s Record-High Rally Continue?

Gold Alliance disclaimer

Gold skyrocketed to an all-time high of $2,195 per ounce on March 8.

And many gold owners who’ve seen how gold tends to perform during times of economic turmoil were ready because they remembered… 

  • Gold gained after the 2000 dot-com crash—rising almost 60% by 2004… 
  • After the 2008 subprime crisis, gold gained almost 140% by 2011… 
  • And during the 2020 Covid-19 pandemic, gold jumped over 60%. 

Since 2000, through several economic downturns and crises, gold’s value has increased over 650%. 

But some investors were surprised by gold’s performance because government data shows the US economy is on the upswing right now, so… 

What’s behind THIS record-high rally… and will it last? 

Forbes says, “Within the U.S., there are several other explanations for the gold bump,” including investors looking “for ways to bet against the potential of worse-than-expected inflation.” 

Yes, the Fed’s efforts have brought inflation down from its 2022 peak, but it’s not over… it’s just not rising quite as fast as it was.  

The truth is, for most Americans inflation is still a pain in the pocketbook. 

Prices for just about everything are still going up. 

And the effects of inflation’s “hidden tax” are cumulative. 

Every time inflation accelerates, you lose more purchasing power.  

Meanwhile, gold tends to rise when the dollar’s purchasing power drops. Which makes investor concerns over inflation a likely contributor to gold’s current tailwinds. 

At the same time, geopolitical conflicts are growing and… 

We’re a few months away from the presidential election. 

Forbes says investors may reposition their portfolios to “safeguard against geopolitical instability, with issues such as the wars between Israel and Hamas and Russia and Ukraine, along with November’s presidential election looming on the minds of investors.”  

And for the US-China relations, UBS Global Wealth Management chief Solita Marcelli says, “…the potential for Republican presidential candidate Donald Trump to heighten tensions between the U.S. and China are also all reasons to remain bullish on gold going forward.” 

It’s a scenario we’ve seen before: 

“That’s precisely what happened in Q1 2022, when the Russia-Ukraine conflict helped gold gain 6%,” says  

“This was also evidenced when the current conflict between Hamas and Israel erupted in Q3 2023. The day before the Hamas attack, the price of gold was $1,834.60/troy ounce. By Oct. 27, 2023, 20 days after the attack, the price of the precious metal had increased 8.78% to $1,995.80/troy ounce.” 

But one of the most potent near-term catalysts may be… 

Looming rate cuts. 

In early March, investors forecast a 58% chance of Fed rate cuts by June. Now, the CME FedWatch tool shows forecasts have risen to a 73.9% chance. 

And when interest rates drop, Treasury yields are likely to drop. 

The 10-year Treasury yield is already down 17.6% from its 12-month high. So, when the Fed cuts rates in 2024, falling real yields could become a key driver behind gold prices as some investors move capital to defensive assets like gold. 

JP Morgan strategist Gregory Shearer agrees and says, “Across all metals, we have the highest conviction on a bullish medium-term forecast for both gold and silver over the course of 2024 and into the first half of 2025.” 

The question is: 

How high could gold rise if the rally continues? 

Goldman Sachs forecasts gold rising 6% in the next 12 months. 

JP Morgan forecasts gold hitting $2,300 this year. 

And Citi analysts give gold a 25% probability of averaging a record-high of $2,300 in the second half of the year with a possibility of $3,000 in the next 12 to 16 months. 

In other words… 

If you’ve been thinking about diversifying with gold to help defend your wealth in uncertain economic times but haven’t made your move yet… 

Don’t wait. 

Because last week’s historic rally may only be a tiny preview of a massive potential gold rush yet to come. 

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