If you had any large amount of money invested in bearish bets on just about anything in 2024, you probably by now regret it.
While we saw uranium prices cool off and battery metals (and rare earths) continue their price declines borne from a sluggish China and post-COVID world, gold has been the star metal of the year.
It looked like it could have been copper as the year got underway, but by mid-December, much of its 2024 upward price action had been reverted.
Of course, the copper megatrend is still probably a safer bet than not – prices are well above where they were before the pandemic.
Take a look at the copper price chart for the last 10Y:
However, copper didn’t end up being the most important metal of 2024.
It came to be gold.
Compare the above 10Y chart to that for the safe haven asset:
Perth Mint’s O’Donoghue outlines historic run
Geopolitics was the foremost dominant catalyst driving gold prices up this year, but we also saw a lot of gold purchases from the Chinese Central Bank (and other governments) as countries look to diversify to vary exposure to the USD.
This desire, outlined to HotCopper by Perth Mint General Manager Depository John O’Donoghue, was only part of why prices made the history books this year.
(Though, gold has gone even higher faster at other points in the past.)
“To the end of November, gold is up year to date [in AUD] around 33% [and] that’s outperformed the ASX200,” O’Donoghue said – but noted over 20 years, it’s more of a 10% return per annum.
O’Donoghue also noted gold has recently decoupled from its otherwise predictable habit of tracking inflation. Right now, we’re seeing it run above and beyond – with the question for gold traders probably being how long that can last.
But O’Donoghue saw clearly why gold is outpacing its usual growth in line with inflation.
“A number of factors are at play: Ongoing geopolitical tensions… concerns before the US election, we’ve also seen central banks buying… so that’s all contributing to the demand for gold which is pushing the price higher.”
As for the year ahead? O’Donoghue was reluctant to comment. Many analysts are making bold predictions for 2025, he observed, but said we’d have to “wait and see.”
Luckily: There are already plenty of predictions floating out there.
2025 outlook
There’s truly been no shortage of analysts (and other individuals who like to forecast) making bold predictions for the price of gold through 2025.
One is hard-pressed to blame them.
With the historical run we’ve seen this year, and with key drivers pushing up the price in 2024 not really going anywhere quickly, it’s hard to think otherwise.
Here’s a rundown of some notable forecasts published in recent weeks, to give you an idea of which way consensus is heading.
- Gold to hit US$3,000/oz in 2025 – Joni Teves @ UBS
- Gold to hit US$3,000/oz by end of 2025 – Lina Thomas @ Goldman Sachs
- Gold to trade at US$3,000/oz for parts of 2025 – Axel Rudolph @ IG
- Gold to hit upper range of US$2,950/oz in 2025 – Henrik Marx @ Heraeus
- Rise +14% to average US$2,750/oz in 2025 – Nicky Shiels @ MKS Pamp
- Gold at US$3,000/oz in early 2025 – Julia Kandoshko @ Mind Money
- A run at US$3,500/oz is “doable” – Lobo Tiggre @ Independent Speculator
It doesn’t take a genius to see that most financial analysts see gold rising further to hit the US$3K/oz mark (with varying levels of detail about when that will occur.) I understand this isn’t the world’s most exhaustive consensus-collecting exercise, but I also don’t think there needs to be one.
It’s easier to find bulls than bears, right now, put it that way.
And generally, the larger the size of a crowd expecting something in markets, the more chance there is of that thing happening – a self-fulfilling prophecy of sorts.
Or consensus reality, if you will. And that consensus has widely discounted any kind of shock correction in gold prices any time soon. (Touch wood.)