Gold has had a standout year in 2024, with prices surging 26%, marking the strongest annual performance since 2010 when the precious metal gained nearly 30%. The year was dominated by a dramatic rally from February to October, during which gold prices soared by 40%.
A Year of Milestones for Gold
Gold began 2024 on a strong footing after spending over three years in a trading range. The $2,000/oz level, which had been a challenging resistance point, became a key support as the Federal Reserve signaled the possibility of rate cuts despite elevated inflation. In February, after a brief dip below $2,000/oz, a dovish comment from Chicago Fed President Austan Goolsbee sparked renewed bullish momentum, driving gold to new all-time highs. The year’s low of $1,984, recorded around Valentine’s Day, marked the start of a massive rally that peaked on October 31 at $2,800/oz.
Gold and the Fed’s Rate Policy
Much of gold’s strength in 2024 can be attributed to shifting monetary policy from the Federal Reserve. Inflation remained above the Fed’s 2% target throughout the year, but dovish signals and an eventual “jumbo” rate cut of 50 basis points in September fueled bullish sentiment. After the rate cut, gold briefly tested the $2,600/oz level before pulling back due to profit-taking, only to resume its upward momentum through the end of Q3 and into early Q4.
Q4: Challenges and Resilience
The final months of 2024 brought challenges for gold bulls as the U.S. dollar strengthened and the U.S. Presidential Election introduced market uncertainties. Despite stalling near the $2,800/oz mark, gold managed to retain key support levels, holding around $2,600/oz as the year drew to a close. Sellers briefly took control following the election, with some speculating that a more favorable regulatory environment for Bitcoin under Donald Trump’s administration might divert investment demand from gold to cryptocurrencies.
What Lies Ahead for Gold in 2025
Heading into 2025, gold remains in a technically strong position. An ascending triangle pattern has formed on short-term charts, suggesting potential for further gains if resistance at $2,721/oz is broken. However, downside risks include a break below support levels at $2,547 and $2,500, which could signal a deeper retracement.
While the Fed’s policy on rate cuts and inflation control will continue to influence gold prices, the increasing competition from alternative assets like Bitcoin could play a critical role in shaping market dynamics next year. For now, gold remains a favored safe-haven asset, closing out 2024 with one of its most impressive performances in over a decade.
