Gold Was One of 2024’s Best Performing Assets

By Rob Bates | January 08, 2025

The price of gold jumped 26% in 2024, smashing some 40 records along the way and outperforming most other asset classes, including the U.S. stock market, according to the World Gold Council.

Joe Cavatoni, WGC’s senior market strategist for the Americas, believes that strong performance will continue through 2025.

“It will definitely be an exciting year,” he tells JCK. “I think the international consumption of gold will probably remain high. I think the Western investor will probably sit tight, keep gold as a safe haven.… The political and geopolitical landscape is the thing to keep a close watch on.”

Incoming President Trump’s plans to institute massive tariffs could spark inflation, Cavatoni says—typically a bullish sign for gold. He also believes the yellow metal will continue to be seen as a safe haven in times of turmoil.

“The geopolitical landscape is not clear,” he says. “It’s getting more challenging. Europe is starting to enter a really interesting time, with a French government still to be figured out, and a German election around the corner. It looks a little unstable there.

“We’re looking at the Ukraine conflict still being on the radar, and the Middle East continuing to be hot,” he says. “And ultimately how the U.S. will look at that and navigate its international role is also in question.”

He declines to say if gold will reach $3,000—at press time, it was trading around $2,650—though he notes that analysts are forecasting it will eventually hit that level. (Goldman Sachs recently wrote it sees gold hitting that target by mid-2026, later than it originally forecast.)

One of major things that fueled the yellow metal’s rise last year was buying from central banks; Cavatoni says 2024 was the 14th straight year they were net purchasers of gold. While central banks have typically leaned on the U.S. dollar as a reserve currency, the dollar performed unevenly last year, and some countries have concerns about sanctions limiting their ability to trade U.S. currency.

“Most of the central banks are looking at gold the same way that you would as an investor,” he says. “They’re saying, ‘I see the benefits of diversifying into gold in my reserve portfolio.’”

All this interest from central banks fueled a “quite substantial” jump in demand for bullion from Eastern investors, particularly in China, India, and Japan, Cavatoni says.

“When the Chinese central bank, the PBOC [People’s Bank of China], is buying, that gives a lot of unspoken confidence to investors,” he says. “But if you look at the dynamic in China, you’ll find the stock market was suffering pretty severely, the property market hadn’t rebounded, and the renminbi [the Chinese yuan] was under a bit of pressure.… There was a move to the Shanghai Futures Exchange, Shanghai Gold Exchange, and the ETF [exchange-traded fund] markets.”

The Federal Reserve’s decision to cut interest rates in September increased Western investors’ interest in gold, but that was short-lived, Cavatoni adds.

“Mid- to late-summer, Western investors [came] back to the game,” he says. “We saw a modest pop from the Western investment community.”

The rising price of gold has hurt sales of gold jewelry, including in the United States. But Cavatoni hopes consumers will eventually comes to terms with the fact that gold had gotten very expensive.

“I’m keen to see when the consumer can accept the $2,650 number [for gold],” he says. “These price levels that we’re seeing are sticking.”

The WGC’s Gold Outlook 2025 can be seen here.

Photo: Getty Images