Gold Success in 2024: The Economy Wasn’t the Only Driver

Any discussion of gold at this time in history is likely to begin with it’s long bull run. Gold success in 2024 is built on a rally that began in 2022. Many investors, including those who have looked to gold IRAs for diversification into a physical asset for retirement, are wondering what will happen next—especially because the price of gold dipped after the recent presidential election.

However, in spite of the post-election drop, by mid-December 2024, gold was up over 32% from its price at the beginning of the year.[1] Silver did even better in 2024 with a 36% increase over the same period.[2]

This rally came in spite of the benchmark federal funds rate climbing 525 basis points from March 2022 through mid-December, which made it the fastest rate hike cycle in about 40 years.[3]

Usually, gold and silver have been sensitive in a negative way to rate hikes, so everyone is wondering how they managed to thrive in spite of the Federal Reserve’s rate-tightening regime.

A variety of analysts chalk it up to both individuals and organizations wanting to harness precious metals’ safe-haven potential as a way to hedge against the year’s substantial geopolitical risks.

Analysts at Banque de France, for example, said, “The price of gold has risen sharply, invalidating the traditionally strong correlation between the price of gold and ETF outflows, or with U.S. real interest rates since the start of the war in Ukraine. This jump appears to be justified by investors buying for nonfinancial reasons, motivated by geopolitical tensions.”[4]

After post-election drops in the price of gold, by mid-December 2024 it was back up to $2,760 per ounce, just a few dollars under the all-time high price of $2,800 per ounce (the price right before the 2024 election).

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Evidence of Gold Safe-Haven Harnessing at End of 2024: China’s Gold Buying; Syria and South Korea Tension

Even as gold and silver weakened in the face of post-election dollar strength, some strategists suggested that ongoing gold price support would come from safe-haven gold buying.

Peter Grant, a metals strategist, said he believed the market would focus after the election on factors such as “geopolitical tensions, concerns about the Chinese and European economies, soaring global debt levels, ongoing central bank gold buying, and the political uncertainty in Germany and Japan.”[5] His suggestion proved out not long after he said it. 

What do these factors have in common? They all are strong indicators of uncertainty or volatility that turn investors to safe-haven assets such as gold and silver. (See more details about each factor in the full article—link at beginning of this page.)

• The People’s Bank of China (PBOC) began purchasing gold again after seven months of abstaining.[6] Bloomberg said, “The resumption of buying shows the PBOC is still keen to diversify its reserves and guard against currency depreciation, even with bullion near record-high levels.”[7]  
• Syria collapse boosted demand for traditional safe-haven gold. When the country’s capital, Damascus, was overtaken by rebel troops[8], analysts began weighing in with projections of increased safe-haven demand for gold.[9][10]
• Martial law was declared in South Korea for the first time in 40 years.[11] Even though the declaration was rescinded in just a few hours, the rapid increase in uncertainty precipitated increased interest in safe-haven gold.[12]

The resulting optimism about precious metals’ safe-haven qualities led to a 4% elevation in price for gold and a 4.5% increase for silver.[13]

Some say the favorable increase was helped by a belief that monetary policy would be favorable into 2025.[14]

How High Will Gold’s Price Go in 2025? Some Say $3,000.

As post-election concerns about gold’s price drop petered out, we began to see various credible analyst teams enthusiastically project that the safe-haven aspects of precious metals would carry their price momentum through the foreseeable future.

Goldman Sachs, for instance, suggested that factors such as geopolitical upset, inflation, and perceived fiscal uncertainty could mean that the price of gold would climb as high as $3,150 per ounce in 2025.[15] Bank of America[16] and UBS[17] offered similar projections (see details in full article: link at top of this page).

Central banks certainly seem to still believe in the power of gold. They are buying gold even as the price rises to hedge against inflation and crises by diversifying their reserves and harnessing the metal’s safe-haven potential.[18]

Although individual investors have different concerns than central banks and purchase much smaller amounts of precious metals, many of them are activating some of the same risk mitigation strategies with their own personal portfolios. Some still seem to perceive alternative assets such as gold and silver as “exotic” and difficult for individuals to access, but that’s no longer true. 

In particular, the gold IRA, an IRS-approved self-directed retirement account is becoming more common with retirement savers as an easy way to gain the benefits of assets noncorrelated with traditional paper-based accounts. Although no one can really know what will happen, and each investor needs to do what’s best for themselves, the success of gold in 2024 after the presidential election and its projected success in 2025 seem to suggest that gold and silver’s safe-haven qualities are still in play.

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[1] CNBC.com, “Gold COMEX (Feb′25)” (accessed 12/12/24). 

[2] CNBC.com, “Silver COMEX (Mar′25)” (accessed 12/12/24). 

[3] FederalReserve.gov, “Open Market Operations” (accessed 12/12/24). 

[4] Victor Baccarini et al., Banque de France, “How can we account for the increase in the price of gold?” (September 13, 2024, accessed 12/12/24). 

[5] Saefong, “Why gold prices are now dropping.” 

[6] Sybilla Gross, Atul Prakash and Jack Ryan, Yahoo Finance, “Gold Rises as China Resumes Buying and Syria Boosts Haven Demand” (December 9, 2024, accessed 12/12/24). 

[7] Sybilla Gross, Atul Prakash and Jack Ryan, Bloomberg.com, “Gold Rises as China Resumes Buying and Syria Boosts Haven Demand” (December 9, 2024, accessed 12/12/24). 

[8] Ammar Cheikh Omar, Carol E. Lee and Corky Siemaszko, NBC News, “Syrian rebels capture Damascus as President Assad flees the country” (December 8, 2024, accessed 12/12/24). 

[9] Gross, Prakash and Ryan, “Gold Rises as China Resumes Buying.” 

[10] Tina Teng, Euronews, “Gold rallies ahead of Central Bank rate decisions and post-Syria tensions” (December 11, 2024, accessed 12/12/24). 

[11] Foster Klug, AP News, “What to know about South Korea’s martial law and the impeachment vote threatening its president” (December 12, 2024, accessed 12/12/24). 

[12] Se Eun Gong, NPR.org, “South Korea’s Yoon defends martial law decree as an act of governance” (December 12, 2024, accessed 12/12/24). 

[13] CNBC.com, “Gold COMEX (Feb′25)”; CNBC.com, “Silver COMEX (Mar′25).” 

[14] Anushree Ashish Mukherjee and Anjana Anil, Reuters.com, “Gold hits two-week high in the run-up to US inflation data” (December 10, 2024, accessed 12/12/24). 

[15] Christiaan Hetzner, Yahoo Finance, “Donald Trump’s presidency could light a speculative fire under gold, pushing the price to a fresh all-time high” (November 19, 2024, accessed 12/12/24). 

[16] Bloomberg.com, “BofA’s Blanch Sees Gold at $3,000 by End of 2025” (December 4, 2024, accessed 12/12/24). 

[17] Julian Wee, UBS, “Silver: Not everything that glitters is gold” (November 4, 2024, accessed 12/12/24). 

[18] World Gold Council, “2024 Central Bank Gold Reserves Survey” (June 18, 2024, accessed 12/12/24).