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Current Performance of Gold
Investors are keenly pondering about the recent unusual price rise of gold, as it continues to settle at unprecedented high prices. Monday ended with gold priced at $2,114 per ounce, having ticked off a peak of $2,119. The bullish trend persisted on Tuesday with gold trading at $2,127 per ounce, just short of its record-breaking climax from December the previous year.
Owing to the persistent speculation among investors about the Federal Reserve’s plans to slash rates in June, gold prices are speculated to climb even further to set a fresh high.
Projections for Gold Prices into 2024
HSBC analysts have issued a statement this week stating that the gold bounce back sustained irrespective of elevated yields. While they predict that new heights will be achieved by the precious metal, they also caution that this surge might be excessive. They added that gold is upheld by the constant overseas political turmoil and uncertainties in the financial market, however, they are expecting a slowdown in tangible demand.
On a different note, analysts from Citi have expressed a medium-term optimistic stance for gold, attaching a 25% likelihood that gold will average an unprecedented $2,300 per ounce in the second semester of 2024. They further suggested a unlikely yet possible scenario where gold could trade at a whopping $3,000 per ounce in the upcoming 12 to 16 months.
Despite a shift in the gold market trading flows, marked by diminution of Comex and ETF trades and an escalating preference for over-the-counter markets, a medium-term bull run is foreseen after a period of price consolidation. They added, maintaining the uptrend will place an upward risk on their original 2024 base price predictions for gold. GoldPriceForecast analysts have, however, adopted a more conservative attitude, pointing to the unstable annual returns of gold during election years.
UBS, in their recent statements, suggest a steady demand for gold despite repricing of rates, being bullish on gold's forecast of $2050 per ounce in June and $2,250 per ounce by 2024's end. They also projected a similar figure for March 2025. UBS asserts that gold is an appealing standalone investment option owing to its potential as a safeguard against risks.
Making an Investment in Gold
One can proceed with investing in gold through a variety of options, each offering unique attributes and requiring informed considerations. Gold exchange-traded funds (ETFs) provide a convenient method of investing in the gold market. Without worrying about physically storing or trading in gold futures, one can invest in these funds whose valuation is coupled with the gold price changes, easily tradeable on stock exchanges.
Physical gold investments, through coins, bars, or bullion, involve understanding considerations around its storage, safety, and insurance. Gold futures allow investors to engage in the gold market, requiring the binding agreement on acquiring a predetermined quantity of gold at a specified price on a future date. This however is best suited for investors well-versed with market trends.
Additionally, investments through gold mining companies opens up another gateway to the gold market, offering exposure through owning companies involved in exploration or procurement of gold. Nonetheless, take into account the fact that the performance of these stocks is due to numerous variables and not solely the gold price.
