August 2024: A Month of Achievements and Aspirations

2024-09-15 07:00:40

The month was marked by new historical highs reached during the sessions, at 2531 dollars during the day of August 20, and at 2282 euros during the session of August 29.

Since the beginning of the year, the appreciation of the yellow metal has reached 21.24%, making it the best traditional asset class of 2024, ahead of stocks, bonds and real estate.

Gold is now ahead of US tech stocks through 2024. Over the month of August, the CAC 40 rose by 1.32%, much like the yellow metal. However, since the beginning of the year, the appreciation of the Paris index has only reached 1.27%, almost 20 points less than the appreciation of the ounce.

Only cryptos do better, with Bitcoin’s performance of around 35%, but with a risk (volatility) 3 times higher than that of gold, which gives a significantly less favorable risk/return ratio.

Global economic slowdown and rate cuts

In August, the news from China was disappointing, with a fourth consecutive month of contraction in manufacturing activity. This slowdown is worrying and is having an impact on commodity prices, with significant declines in oil and copper, which are closely linked to the health of the Chinese economy. The Chinese stock market continued its decline, with a drop in August and the first days of September of more than 7%. The Shenzhen index is now close to a 5-year low.

In the United States, the latest indicators from the American central bank (beige book) point to a stagnant or slightly declining economy. Non-farm payroll figures were below expectations and inflation was rather contained, which is reinforcing expectations of a rate cut by the central bank. The consensus is now counting on a cut at the next monetary policy committee. Expectations amplified by the recent comments of Jerome Powell, during the Jackson Hole symposium, during which the Fed president signaled an imminent rate cut.

Periods of falling interest rates, or more accommodative monetary policy, have historically proven more favorable to the yellow metal. A well-known relationship that helps support the price of gold in this pivotal period.

Optimistic forecasts

While the price of gold is a few points below its historic highs, several specialists have revised their forecasts upwards. UBS analysts believe gold will appreciate over the next two years, reaching above $2,600 by the end of the year and $2,800 by the end of 2025. In a recent presentation, the team highlights central bank purchases, resilient consumer demand, upcoming monetary easing, and the fact that the market is not yet saturated. Many investors can still increase their allocation to the yellow metal.

Goldman Sachs has revised its forecast upwards to $2,700 an ounce by early 2025. In a note entitled “Go for Gold”, the investment bank believes that the upcoming rate cuts will reactivate demand for investment gold in developed countries, a component of demand that has been largely absent and potentially important until now.

A more moderate view from Natixis, which sees the price stagnating around $2,500 per ounce in 2024, and rising to around $2,600 in 2025.

Central banks still buying

The trend of purchases by central banks continues. According to the World Gold Council, these amounted to 37 tonnes in July, a sharp increase compared to June (12 tonnes). The largest buyer was the central bank of Poland with an additional 14 tonnes, bringing its total reserves to 392 tonnes. The neighbouring country of Ukraine has thus increased its reserves by more than 160 tonnes since March 2023. Next come Uzbekistan (+10t), India (+5t) and Jordan (+4t). Qatar and the Czech Republic bought more modestly around 2 tonnes each in July.

Russia increases its foreign currency and gold purchase program sevenfold

The Russian Finance Ministry announced via the Russian news agency Interfax the drastic increase in foreign currency and gold purchase programs. Due to higher than expected oil and gas revenues, the daily volume of purchases on the markets is expected to increase to 8.2 billion rubles, or more than 80 million euros per day. While it is difficult to estimate how much gold will be purchased, it is likely that the amount will increase.

In a recent statement, the Russian central bank announced that it held $188 billion in gold reserves, reaching a record 30.8% of the country’s total foreign exchange reserves.

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– Why are gold prices reaching ⁤record​ highs⁤ in 2024? ⁢

Gold Soars to Record Highs: A Safe Haven in ⁣Uncertain Times

The month of August 2024 will be remembered as a milestone‌ for gold, with the ‍precious metal reaching new historical highs. On ⁤August 20, ​gold prices surged to ⁤$2531 ⁣per ounce, and on August 29, it reached €2282 per ounce, solidifying its position as the best-performing traditional asset class of 2024.

Outperforming Other Assets

Since the‌ beginning of the year, gold has⁣ appreciated by an impressive 21.24%, outpacing stocks, bonds,​ and ⁣real ⁤estate. In comparison, the CAC‍ 40 index has risen by a ⁢mere 1.32% over the same period, while US tech stocks ⁤have struggled to‌ keep up with the yellow metal. Even⁤ cryptocurrencies, which have had a remarkable ‍year,⁢ have a risk-return ratio that is significantly ⁤less favorable⁤ than gold’s.

Global Economic Slowdown and Rate ⁢Cuts

The economic slowdown in China has been⁤ a major concern, with manufacturing activity contracting for the fourth consecutive month. This has had a ripple ‌effect on commodity prices, with oil and copper experiencing significant declines. The Chinese stock market has also taken a hit, ‌with the Shenzhen ⁣index plummeting to a‌ five-year low.

In the United States, the latest​ indicators from ‍the Federal Reserve⁣ point⁤ to a stagnant or slightly declining economy. ⁤Non-farm payroll figures were below expectations, and inflation remains contained, which has reinforced ⁤expectations of a rate cut by ⁤the central ⁢bank. Fed Chairman Jerome Powell’s recent comments at the Jackson Hole⁤ symposium have further fueled expectations of an ​imminent rate ⁣cut.

A Historically Favorable‍ Environment

Periods of falling interest rates or more accommodative ​monetary policy have historically ‍been⁤ beneficial‌ for gold prices. As central banks around the world adopt more dovish policies, gold is likely to continue ​its upward trajectory.

Optimistic Forecasts

Several experts have revised their gold⁢ price ​forecasts ⁤upward, citing factors such ​as central bank ‍purchases, resilient consumer demand, and upcoming ‌monetary easing. UBS analysts predict that ⁢gold will appreciate to⁢ above $2600 by the⁣ end‌ of ⁢the year and $2800 by the end of 2025.⁣ Goldman⁢ Sachs has also revised its forecast upward to $2700 an ounce by early⁤ 2025.

Central Banks Driving Demand

Central⁢ banks ‌continue to ⁢be⁣ significant ⁣buyers of gold, with purchases totaling ⁤37 tonnes in July, up from​ 12 tonnes in June. The central bank of Poland led the pack, adding 14 tonnes to its reserves, while Ukraine has increased its reserves by over 160 tonnes since March 2023.

Russia ‍Increases Gold Purchase Program

In a move that⁣ further underscores the​ appeal of gold, the Russian ​Finance Ministry has announced a sevenfold increase in its foreign currency and gold purchase program.

Conclusion

As global economic uncertainty persists, ​gold ‍has emerged as a ​safe‌ haven for ⁣investors. With its record-breaking performance in August, gold has solidified its position ​as the top-performing traditional asset class of 2024. As central banks ⁣and investors ‌continue to drive demand, gold is likely to remain a attractive option for those seeking ​to diversify ⁣their portfolios and protect their wealth.

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Secondary keywords: central ⁣banks, monetary policy, interest rates,⁤ economic slowdown, asset class, safe ‌haven, cryptocurrency, stocks, bonds, real estate, CAC 40, US tech stocks, ⁣Jerome Powell, ⁤Federal Reserve, Jackson ‌Hole symposium, UBS, Goldman Sachs, Natixis, World Gold Council, Russia,⁤ Poland, Ukraine, gold reserves

– What factors are contributing to the record highs in gold prices in 2024?

Gold Prices Reach Record Highs in 2024: What’s Behind the Surge?

The month of August 2024 will go down in history as a phenomenal period for gold, with the yellow metal reaching unprecedented heights. The price of gold surged to $2531 per ounce on August 20, and $2282 per euro on August 29, marking new all-time highs. This remarkable performance has cemented gold’s position as the top-performing traditional asset class in 2024, outshining stocks, bonds, and real estate.

Outpacing Stocks and Cryptos

Gold’s appreciation has reached an impressive 21.24% since the beginning of the year, making it the best-performing traditional asset class. In comparison, the CAC 40 index rose by 1.32% over the same period, while Bitcoin’s performance stands at around 35%, albeit with a significantly higher risk profile.

Global Economic Slowdown and Rate Cuts

The recent slowdown in global economic activity has sparked concerns, with China’s manufacturing sector contracting for the fourth consecutive month. This decline has had a ripple effect on commodity prices, with oil and copper experiencing significant drops. The Chinese stock market has also taken a hit, with the Shenzhen index plummeting to a 5-year low.

In the United States, the latest indicators from the Federal Reserve suggest a stagnant or slightly declining economy, with non-farm payroll figures below expectations and contained inflation. This has led to widespread anticipation of a rate cut by the central bank, which would further boost gold prices.

Optimistic Forecasts

Several specialists have revised their forecasts upward, citing central bank purchases, resilient consumer demand, and upcoming monetary easing. UBS analysts predict gold will appreciate to above $2,600 by the end of the year and $2,800 by the end of 2025. Goldman Sachs has also revised its forecast upward to $2,700 an ounce by early 2025.

Central Banks Still Buying

Central banks continue to be significant buyers of gold, with purchases amounting to 37 tonnes in July. The central bank of Poland led the way with an additional 14 tonnes, followed by Ukraine, Uzbekistan, India, and Jordan.

Why Are Gold Prices Reaching Record Highs in 2024?

The perfect storm of a global economic slowdown, rate cuts, and central bank buying has created a favorable environment for gold prices to soar. As investors seek safe-haven assets to hedge against uncertainty, gold’s appeal is growing. With many specialists predicting further appreciation, the yellow metal is poised to continue its upward trajectory in the coming months.

Key Takeaways:

Gold prices have reached record highs in 2024, with prices surging to $2531 per ounce and $2282 per euro.

Gold is the top-performing traditional asset class in 2024, outpacing stocks, bonds, and real estate.

The global economic slowdown, rate cuts, and central bank buying are driving gold prices upward.

Specialists predict further appreciation, with some forecasting prices above $2,800 by the end of 2025.

Investment Insights:

Gold’s appeal as a safe-haven asset is growing amid global economic uncertainty.

Central banks continue to increase their gold reserves,