2024 is a historic year for gold. On January 1, 2024, the world gold price was at 2,063.73 USD/ounce. Gold prices climbed to $2,749.92 an ounce on November 5, just a few dollars below the recent record high.
According to CBS News, events that could impact gold prices are the 2024 US presidential election and the upcoming decision of the US Federal Reserve (Fed) on interest rates.
Analysts widely predict that the second interest rate cut of the year will take place at the Fed's meeting on November 6-7, and historically, changes in the Fed's interest rate policy have had complex impacts on gold.
While potential investors may hope that gold prices will temporarily fall after the Fed's interest rate decision this week, such a trend is unlikely to happen, according to CBS News analyst Angelica Leicht. After all, gold and interest rates have had a relationship in contrast throughout history, with lower interest rates often accompanying higher gold prices.
Therefore, with the Fed expected to cut interest rates this week, many investors predict that gold prices will increase instead of decreasing, or the interest rate cut may not have a significant impact on gold prices in the short term.
The gold price exchange rate fund is also shaped by many factors other than interest rates, including the strength of the USD, global economic conditions and inflation expectations. While the Fed's upcoming interest rate adjustment may not immediately push gold prices higher, many analysts predict prices will continue to increase, reaching $3,000/ounce before the end of the year.
Some factors behind these optimistic forecasts include strong central bank demand. In recent years, central banks around the world have significantly increased their gold reserves, changing the traditional relationship between interest rates and gold prices. This trend could help gold prices continue to rise.
Investor demand is another factor contributing to the increase in gold, with many buying gold to benefit from price increases. This sustained interest could support further price increases.
And with ongoing global conflicts and growing concerns about US debt, many investors and retailers are turning to gold to diversify their holdings. This demand could further boost gold prices over time.
In other developments, the 2024 US presidential election on November 5 between Democratic candidate Kamala Harris and Republican opponent Donald Trump is expected to be extremely exciting, with the two candidates chasing closely in the race to the White House.
"If Mr. Trump wins, I think gold prices will continue to increase. We will probably be a little more worried about inflation with all the tariffs he is talking about," said Bart Melek, head of commodity strategy at TD Securities.
"I guess the driver for gold this week will be the US election results. In my opinion, the Fed's interest rate cut is unlikely to cause much volatility, as the bank is likely to signal further cuts in line with market expectations," said UBS analyst Giovanni Staunovo.
"Gold will increase higher regardless of who enters the White House because both candidates want to not only maintain spending but also actually increase spending," said Marex analyst Edward Meir.
