Whilst ASX investors have been treated to a relatively successful year in 2024, the ASX's gains pale in comparison to what the gold price has delivered.
The S&P/ASX 200 Index (ASX: XJO) has risen by a healthy 7.52% over the year to date. We can add a few percentage points to the total to account for dividend and franking returns as well. But even so, gold has still run rings around shares this year.
An ounce of gold was going for approximately US$2,077 back in early January. But today, that same ounce is asking roughly US$2,754 – right on the metal's record high. Gold futures are even higher. According to Bloomberg, gold contracts are currently being priced as high as US$2,761 per ounce on the futures market.
If we take that latter piece, gold has climbed by a whopping 32.9% over 2024 to date.
This has, of course, been a boon to many precious metal investors. Anyone owning gold bullion has benefitted from this astronomical rise, as have owners of gold exchange-traded funds (ETFs). Those investors who own shares of ASX gold miners like Newmont Corporation (ASX: NEM) or Perseus Mining Ltd (ASX: PRU) have probably done even better.
However, many investors watching this astonishing run for gold might be wondering whether it's too late to invest in gold, or by extension gold ETFs or miners.
Will the gold price climb even higher?
Gold investors tend to be even more sensitive to the price of gold than stock market investors. That's because gold, unlike most asset classes, is an investment that pays no income to investors for holding it. That's in contrast to dividends from shares, rent from property, or interest from cash or bonds.
Additionally, gold has tended to be a rather volatile commodity in the past, and big runs have often been followed by years of price stagnation. So it wouldn't be too surprising to find investors who are sitting on gold's fence right now.
Well, some experts are predicting that gold's stunning run looks set to continue. As reported in the Australian Financial Review (AFR) this week, Suki Cooper, analyst at Standard Chartered, is predicting more record highs for gold going forward.
Cooper argues that geopolitical tensions, as well as the looming American presidential election, are helping to boost demand for gold:
Gold's ability to latch on to coat-tails that take prices higher irrespective of the macro backdrop suggests that the market continues to see positive underlying flows.
Standard Chartered has pencilled in a gold price of US$2,800 per ounce for the final three months of 2024, rising to US$2,900 for the first three months of 2025.
No doubt this analysis will be welcomed by gold bulls and bugs. But let's see what happens later in the year.
