Disclosure: Our content isn't financial advice. Do your due diligence and speak to your financial advisor before making any investment decision. We may earn money from products reviewed. (Learn more)
Last week, gold broke through a critical resistance point at $2,070—its previous all-time high set in August 2020—to reach a high of $2,135 per ounce as of mid-day Friday. Gold prices have never been higher through the yellow metal’s millennia of history as an investment.
There are plenty of factors at play that caused this spike in gold pricing: geopolitical risks, a weak US dollar, and a dip in bond yields are at the top of the list.
All signs currently point to gold remaining bullish in the months ahead. The Euro (which is inversely correlated to the USD), the yield curve, and inflation all point to sustained strong gold prices for the foreseeable future. Plus, new developments in South Gaza and naval attacks in the Red Sea by Iran-backed rebels suggest that the possibility of a broader conflict in the Middle East is in the cards.
That’s why we’ve seen the yellow metal spike over 5 percent in the past month and nearly 2 percent on Friday alone. There’s just too much uncertainty in the market for anyone to sit comfortably on their paper assets. Smart money is flooding into risk hedge assets like gold.
Many are eyeing gold to sustain price levels above $2,100 per ounce throughout 2024. Others are far more bullish, setting price targets at $2,175 (Morgan Stanley) and $2,400 (Bank of America). However, the upper bound for gold pricing may indeed be well above these marks.
Market Snapshot: December 5, 2023
- Inflation Rate: 3.2%
- Fed Rate: 5.25-5%
- Gold Price: $2,089/oz.
- Silver Price: $25.83/oz.
- Bitcoin Price: $38,771/oz.
- Ethereum Price: $2,090/oz.
Market fundamentals suggest that gold prices will continue to rise in the year ahead. Uncertainty, geopolitical risk, and inflationary pressures have put gold in an advantageous position relative to conventional assets.
No wonder central banks are buying gold at rates we’ve never seen before. Central banks in the U.S., China, Turkey, and elsewhere added hundreds of tonnes of gold to their coffers in Q3 2023, continuing their rapid hoarding campaign that began in 2021. Gold has quietly become the asset to have in 2023—whether for central banks or retail investors.
Unlike gold, fiat currencies and speculative, paper-based assets cannot adequately hedge against economic or geopolitical disasters. Gold, on the other hand, has proven itself to be the go-to safe-haven asset amid deep market uncertainty for investors and central bankers alike.
2024 is looking like a record year for gold. Now is the time to load up.
The price of Bitcoin (BTC) in USD from December 2022 to 2023
While you’re at it, consider Bitcoin and other leading cryptocurrencies as portfolio diversifiers. Right now, Bitcoin prices are higher than they have been since last spring. At the time of writing, one Bitcoin token is trading at over $43,000. That’s a year-to-date gain of +168%!
If you’re considering investing in gold, first read our exclusive reviews of the top gold IRA companies. We’ve taken a close look at the top service providers in the industry that offer alternative assets such as Bitcoin, gold, and silver within a tax-advantaged IRA or retirement account.
Liam Hunt, M.A., is a financial writer covering global markets, monetary policy, retirement savings, and millennial investing. His commentary and analysis have been featured in the New York Post, Reader's Digest, Fox Business, and Forbes.
