Gold is gaining traction significantly amid increased safe-haven appeal after war tremors began. The news of the latest attack on Israel by Iran added to the ongoing Middle East tensions. Furthermore, in response to the fresh 200 drone missile attacks by Iran, Israel didn’t just sit back but retaliated with additional airstrikes in Gaza and Lebanon.
Gold has exhibited quite an impressive rally in the first three quarters of 2024 with almost +680% gains. Given this performance, the market is anticipating a similar movement in the last quarter of this year. Gold marked history this year by reaching a new All-Time High level at $2685.
The interesting thing is that yellow metal is currently hovering very close to this level at $2648, and there is even more chance of further rise ahead. The market favors this precious metal, as all the fundamentals and technical indicators point north and suggest a bullish momentum ahead. This article previews the overall gold movement in 2024 and offers a gold price prediction for Q4.
Timeline of Major Events Driving Gold in 2024
The following part of this article provides a timeline of the key events that shaped gold’s performance throughout the year leading up to October 2024:
January 2024: U.S.-Led Airstrikes on Yemen
Gold began the year slightly above $2,062. At the start of the month, US-led airstrikes in Yemen raised tensions. This exerted short-term pressure on gold prices as it led to instability on the geopolitical front. However, high inflation numbers and a strong U.S. dollar put gold on the back foot until February 2021.
March 2024: Interest rate expected by the Federal Reserve & Middle East unrest
In March, the Fed Chair gently hinted at potential two rate cuts later in the year. This dovish move raised gold prices due to expectations of a weaker greenback. At the same time, rising tension in the Middle East, such as Iran firing 300 missile drones, increased the demand for safe-haven assets. This escalated gold to nearly $2450 by May.
April 2024: Security Threats with Israel’s Strikes on Iran
However, gold experienced a correction in April after the Federal Reserve signalled that a rate cut could be “not as soon as expected.” Meanwhile, Israel’s attack on Iranian militia in Syria increased tension in the region but had a minimum short-term positive effect on the price of gold.
May 2024: Federal Reserve Left Rates Unchanged, Gold Reversal
In May, the Federal Reserve again left interest rates as they were to rein in inflation. Gold prices declined to $2,296 in June and consolidated going forward. At that time, markets kept waiting for the next Fed move while keeping an eye on geopolitical events.
July 2024: Assassination Attempt On Trump & China’s PBoC Discontinues Gold Buys
July was the turning point for gold prices. An assassination attempt on former President Donald Trump increased political risk in the United States. Meanwhile, the People’s Bank of China (PBoC) ceased its 18-month gold-buying spree.
August 2024: Federal Reserve Cuts Rate as Expected
Gold skyrocketed to a new record level, trading at $2,685 in August following Powell’s acknowledgement that the Federal Reserve intends to reduce the interest rates in September. Expectations to see a weaker dollar and increased geopolitical risks contributed strongly to the rising prices of precious metal.
September 2024: Federal Reserve Rate Cut and Middle East Airstrikes
In September, the Federal Reserve slashed its rate by 50 basis points, the first cut in more than four years. As a result of this dovish policy, gold continued its bullish trend. Additionally, with Middle Eastern tensions rising, such as Israeli air strikes in Lebanon, the demand for safe-haven was even higher.
October 2024: The conflict between Iran and Israel has escalated
At the beginning of October, Iran and Israel’s relations have worsened significantly. Iran fired 200 missiles at Israel, thus receiving counter-attacks in Lebanon and the Gaza Strip. This geopolitical insecurity has especially boosted safe-haven demand for gold today, priced at just $40 from the recent ATH level of $2685.
Key Factors to Watch in Q4 2024
The final quarter of 2024 is expected to present multiple factors that could drive gold prices even higher:
- U.S. Election Uncertainty: As the United States election approaches, political risk amplified by volatility can escalate the demand for safe-haven assets, such as gold.
- Federal Reserve’s Next Move: The Federal Reserve’s anticipated further rate cuts at the end of the year could weaken the U.S. dollar provisionally, which would support the gold price.
- Middle East Geopolitical Tensions: The escalating hostilities between Israel and Iran create system risks that could prop up demand for gold as a safe-haven asset.
- Inflation Concerns: Since inflation is still a problem in most global economies, gold’s ability to offer a hedge against increasing costs will likely gain more acceptance.
What Lies Ahead for Gold?
Here, as we advance in what can be labelled as ‘Q4 2024’, the gold price prediction is fundamentally bullish, given that it can cross yet another all-time high. Popular uncertainties such as the U.S. election, the next move by the Federal Reserve, and the increasing conflict in the Middle East will be the key pointers to the movement of gold prices in the forthcoming months. Though no one is likely to know future movements, the mentioned factors indicate that gold may continue to rise through the end of the year.
