🔥 Gold had the biggest gains in 45 years in 2024
Gold (XAU) has soared to record highs this year, marking its biggest gains in 45 years.
👉 Possible effects for traders
Gold prices have soared to record highs this year—the largest gains in 45 years—on escalating geopolitical tensions in the Middle East and anticipated further interest rate cuts by the U.S. Federal Reserve (Fed). XAUUSD has risen by over 34%, marking the biggest annual increase since 1979. ‘[Apart from Middle East geopolitical tensions and U.S. Fed interest rate cuts], topping out of the U.S. Dollar Index (DXY), buying of gold by central banks, especially in emerging markets, fund inflows, and strong consumer demand is driving up the demand for precious metals’, said Siddharth Srivastava, Head-ETF Product & Fund Manager, Mirae Asset Investment Managers.
With less than two weeks remaining until the U.S. presidential election on 5 November, investors are bracing for market volatility. Trump's chances of taking over Democratic candidate Vice President Kamala Harris have recently improved on betting websites, though opinion polls suggest the race is still too close to call. According to Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities, ‘Trump's improving election odds are also tempering market expectations for the Fed to continue easing into 2025, and the possibility of the Fed moving to the sidelines for six months next year can't be ruled out’. Currently, markets are pricing in 41 basis points (bps) of rate cuts for this year, with an additional 100 bps expected next year.
Gold rose above $2,750, reaching another record high during the Asian trading session. Today, traders should focus on the U.S. Existing Home Sales report, due at 2:00 p.m. UTC, which could heighten volatility in USD pairs. If the figures exceed expectations, a stronger U.S. dollar could weigh on gold prices. Conversely, weaker data may support gold by increasing demand for safe-haven assets.
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