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Gold (GC=F) had a strong 2024 and has been rising over the past week, amid concerns about geopolitical and economic uncertainty, but can the precious metal reach fresh highs this year?
The price of gold has risen more than 30% over the past year, with futures hitting an all-time high of $2,789 per ounce in October.
Faced with the uncertainty of elections around the world – with the US particularly in focus – and continued geopolitical tensions, investors flocked to gold as it is considered a safe haven asset.
Gold has since eased back from those highs but has been on the rise over the past week, with futures rising 0.7% on Monday to trade at $2,697.40 per ounce.
Concerns about stubborn inflation have given rise to expectations that central banks will keep rates higher for longer. This has prompted a sharp sell-off in government bonds, particularly in the UK, and pushed the cost of government borrowing higher, adding to fears around sovereign debt levels.
Read more: What the UK government bond sell-off means for the economy and investors
In addition, gold has been rising ahead of US president-elect Donald Trump's return to the White House, with the inauguration set to take place on 20 January. There have been concerns that Trump's proposed policies, including on trade tariffs, will add to inflationary pressures.
Gold is considered to offer a hedge against inflation, as the precious metal is typically priced in dollars. The gold price, therefore, tends to rise if inflation erodes the value of the dollar.
At the same time, the dollar has strengthened over the past couple of weeks, as Trump's proposed policies have been considered as potentially supportive for the greenback, limiting gold's gains.
Goldman Sachs (GS) said in December that it expected gold prices to hit $3,000 by the end of 2025.
However, analysts from the investment bank have since pushed back that timeline, saying that they now expect the precious metal to reach the $3,000 mark in the second quarter of 2026. Instead, Goldman Sachs analysts now believe gold prices could reach $2,910 by the end of this year.
In a poll last week, we asked whether you think the gold price would reach fresh highs this year. We received 600 votes, with 62% believing that the precious metal could notch new records. More than a fifth (22%) disagreed, while 16% were undecided on the matter.
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