Gold has experienced a remarkable performance in the first half of the year, driven primarily by its appeal as a safe-haven asset amid geopolitical conflicts and substantial central bank purchases.
The precious metal’s price surged over 15% year-to-date, trading above $2,300 per ounce for most of the second quarter, marking its best run since the Covid pandemic. Despite high interest rates, a strong US dollar, and divergent trends in US Treasury yields and ETF holdings, gold has set records continuously.
The outlook for gold remains positive, supported by a combination of geopolitical uncertainties and anticipated economic conditions.
US Rate Cut Prospects Boost Gold
![](https://st5.depositphotos.com/16122460/65655/i/600/depositphotos_656550582-stock-photo-many-shiny-gold-bars-background.jpg)
The optimism surrounding potential US interest rate cuts has significantly supported gold prices this year. Lower borrowing costs generally benefit non-interest-bearing assets like gold.
Although the US Federal Reserve has maintained its key policy rate between 5.25% and 5.5%—the highest level in over two decades—recent poor economic data have increased the likelihood of a shift towards monetary easing. The US Bureau of Labour Statistics reported cooling hiring and wage growth in June, with a slight increase in the jobless rate.
Consequently, swap traders now see a 75% chance of a rate cut in the next two months. Projections suggest the Fed funds rate could drop to 4% by next summer, which bodes well for gold prices.
Central Banks’ Continued Gold Purchases
Central banks have maintained their buying momentum, with net purchases of 10 tons in May, led by emerging market central banks. The National Bank of Poland was the largest buyer, followed by the Central Bank of Turkey and the Reserve Bank of India.
Although China’s gold purchases have slowed, with no additions to reserves in May and June, other countries have continued to bolster their holdings. For instance, the Reserve Bank of India added over nine tonnes in June, marking the highest monthly addition since July 2022.
The World Gold Council’s recent survey indicates strong central bank purchasing intentions, with 29% of respondents planning to increase their gold reserves in the next 12 months. This follows substantial annual purchases in 2022 and 2023, reinforcing the outlook for continued robust central bank demand.
Gold ETFs and COMEX Positions Reflect Positive Sentiment
Global gold ETF flows turned positive in May after a year of declines, particularly driven by inflows from Europe and Asia, while North American flows remained negative.
Generally, gold ETF holdings rise with increasing gold prices, and the shift to positive flows in May aligns with the upward trend in spot gold prices. Additionally, net-long positions on the COMEX have hit a four-year high, further contributing to the positive market sentiment for gold.
Safe-Haven Demand and Geopolitical Risks
Gold’s role as an economic hedge is underscored by ongoing geopolitical risks, including the conflicts in Ukraine and the Middle East and tensions between the US and China.
These factors are likely to sustain safe-haven demand for gold in the short to medium term. The upcoming US presidential election in November and anticipated Federal Reserve rate cuts are also expected to support gold prices through the end of the year. Central bank purchases are projected to continue, providing additional support.
Strong Gold Performance Set to Continue
![](https://st5.depositphotos.com/81183010/66993/i/600/depositphotos_669932378-stock-photo-gold-plate-buddhist-gold-buddhist.jpg)
Gold has demonstrated resilience and strength as a safe-haven asset amid global uncertainties. Despite the challenges posed by high interest rates and a strong US dollar, the precious metal has set records and shown positive growth.
With continued central bank demand and potential US interest rate cuts on the horizon, gold is poised to maintain its upward trajectory. Investors can expect gold prices to remain strong, supported by both geopolitical factors and economic conditions.
DISCLAIMER
You should read and understand this disclaimer in its entirety before joining or viewing the website or email/blog list of SmallCapStocks.com (the “Publisher”). The information (collectively the “Advertisement”) disseminated by email, text or other method by the Publisher including this publication is a paid commercial advertisement and should not be relied upon for making an investment decision or any other purpose. The Publisher is engaged in the business of marketing and advertising the securities of publicly traded companies in exchange for compensation. The track record, gains, upside, and/or losses mentioned in the Advertisement, if any, should not be considered as true or accurate or be the basis for an investment. The Publisher does not verify the accuracy or completeness of any information included in the Advertisement. While the Publisher does not charge for the SMS service, standard carrier message and data rates may apply. To unsubscribe from receiving promotional text messages to your phone sent via an autodialer, using your phone reply to the sender’s phone number with the word STOP or HELP for help.
The Advertisement is not a solicitation or recommendation to buy securities of the advertised company. An offer to buy or sell securities can be made only by a disclosure document that complies with applicable securities laws and only in the states or other jurisdictions in which the security is eligible for sale. The Advertisement is not a disclosure document. The Advertisement is only a favorable snapshot of unverified information about the advertised company. An investor considering purchasing the securities, should always do so only with the assistance of his legal, tax and investment advisors. Investors should review with his or her investment advisor, tax advisor or attorney, if and to the extent available, any information concerning a potential investment at the web sites of the U.S. Securities and Exchange Commission (the "SEC") at www.sec.gov; the Financial Industry Regulatory Authority (the "FINRA") at www.FINRA.org, and relevant State Securities Administrator website and the OTC Markets website at www.otcmarkets.com. The Publisher cautions investors to read the SEC advisory to investors concerning Internet Stock Fraud at www.sec.gov/consumer/cyberfr.htm, as well as related information published by the FINRA on how to invest carefully. Investors are responsible for verifying all information in the Advertisement. As an advertiser, we do not verify any information we publish. The Advertisement should not be considered true or complete.
The Publisher does not offer investment advice or analysis, and the Publisher further urges you to consult your own independent tax, business, financial and investment advisors concerning any investment you make in securities particularly those quoted on the OTC Markets. Investing in securities is highly speculative and carries an extremely high degree of risk. You could lose your entire investment if you invest in any company mentioned in the Advertisement. You acknowledge that we are not an investment advisory service, a broker-dealer or an investment adviser and we are not qualified to act as such. You acknowledge that you will consult with your own independent, tax, financial and/or legal advisers regarding any decisions as to any company mentioned here. We have not determined if the Advertisement is accurate, correct or truthful. The Advertisement is compiled from publicly available information, which include, but are not limited to, no cost online research, magazines, newspapers, reports filed with the SEC or information furnished by way of press releases. Because all information relied upon by us in preparing an advertisement about an issuer comes from a public source, it is not reliable, and you should not assume it is accurate or complete.
By your subscription to our profiles, the viewing of this profile and/or use of our website, you have agreed and acknowledged the terms of our full disclaimer and privacy policy which can be viewed at the following link: www.SmallCapStocks.com/Disclaimer and www.SmallCapStocks.com/Privacy-Policy
By accepting the Advertisement, you agree and acknowledge that any hyperlinks to the website of (1) a client company, (2) the party issuing or preparing the information for the company, or (3) other information contained in the Advertisement is provided only for your reference and convenience. The advertiser is not responsible for the accuracy or reliability of these external sites, nor is it responsible for the content, opinions, products or other materials on external sites or information sources. If you use, act upon or make decisions in reliance on information contained in any disseminated report/release or any hyperlink, you do so at your own risk and agree to hold us, our officers, directors, shareholders, affiliates and agents harmless. You acknowledge that you are not relying on the Publisher, and we are not liable for, any actions taken by you based on any information contained in any disseminated email or hyperlink.
![Jackson Hartwell](https://smallcapstocks.com/wp-content/uploads/2024/01/image_160-150x150.png)
I’m Jackson Hartwell, a writer who specializes in dissecting current business events. I’m dedicated to providing you with clear and concise insights into the world of politics, making it easier to understand the latest news and developments.