Gold surged to fresh record highs across 2024, with the latest and most significant leg higher occurring in the third quarter. From a low point in February at $1984, the Gold price surged over 30% to reach a record high of $2685, rising the equivalent of $615 dollars per ounce across that period.
The precious metal hit repeated record highs in Q3 with only modest pullbacks. However, there are some signs that the bullish move may be running out of steam. Here, we look at what is driving Gold prices, whether new highs could be expected over the coming months, and whether gold can reach $3000 before the end of the year. We also delve into how to trade Gold with the global Forex and CFD broker PXBT.
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Why Did Gold Rally in Q3?
Gold surged almost 13% in Q3, driven by USD weakness and rising expectations that central banks, particularly the Federal Reserve, would cut rates. The Fed didn’t disappoint, kicking off the first rate-cutting cycle in four years with a bumper 50 basis point rate reduction. The Fed signalled two more rate cuts to come, pulling the US dollar lower and boosting demand for non-yielding US dollar-denominated gold.
Gold was also supported in Q3 by geopolitical tensions driving safe-haven demand due to the Middle East conflict. Central banks also continued to buy the precious metal to lift reserves amid geopolitical and economic uncertainty.
Gold outlook for Q4
Heading into the final quarter of the year, the fundamentals that lifted Gold in the previous quarter are set to remain in place. Monetary policy across major economies is expected to loosen, and geopolitical tensions are showing signs of escalating rather than easing.
Fed rate cuts
The market expects the Federal Reserve to cut interest rates by 50 basis points before the end of the year. These are expected to be two 25-basis-point rate cuts, one in November and one in December. The prospect of looser monetary policy should continue to support the price of gold.
However, given recent strong data, including stellar jobs reports and higher-than-expected inflation, the market is starting to question whether the Fed will be able to cut interest rates as aggressively as initially expected, which could limit the upside for the precious metal and could see the USD hold recent gains as it trades 2% higher in October after falling 3% in Q3.
Safe-haven flows
Safe haven demand is expected to remain strong in the quarter as geopolitical tensions in the Middle East show no signs of easing, quite the opposite - raising concerns over a broadening out of the conflict.
US elections
Uncertainty surrounding the US presidential elections ahead of the November 5th polling day could also help support the precious metal as it brings unease on the course of fiscal policy and overall market instability.
At the time of writing, the polls are extremely close, with Democratic candidate Kamala Harris very slightly ahead of Republican candidate Donald Trump.
Looking at the data, it is tough to draw correlations between Democratic or Republican wins and Gold prices over the years. That said, Donald Trump supports protectionist, inflationary policies that could lift the USD, potentially limiting the upside in Gold.
Trading Gold with PXBT
A lower interest rate environment, central bank buying, and safe haven flows are expected to support Gold prices in the coming quarter. However, some risks such as the Fed cutting rates at a slower pace or a Trump win in the election could limit gains in Gold. No asset, including Gold, rises in a straight line, and bumps along the way will likely emerge. $3000 looks likely for Gold prices, although possibly not as soon as this quarter.
Traders looking to capitalise on potential price movements in Gold can do so through an online broker, such as PXBT.
PXBT is a regulated CFD broker that provides seamless access to a diverse range of markets, including Forex, Indices, and Commodities such as Gold, all available through the MT5 platform. Gold traders, in particular, will benefit from the platform’s sophisticated charting tools, multiple timeframes, and rich array of technical indicators. Additionally, PXBT stands out with its low fees, tight spreads, and lightning-fast execution speed, enabling traders to make the most of their opportunities. With 24/7 support and a secure trading environment, PXBT is well-positioned to empower traders worldwide, helping them navigate markets with confidence.
Disclaimer: The information provided herein is for informational purposes only and does not constitute personal recommendation and/or investment advice. Past performance is not a reliable indicator of future results. The financial products offered by the Company are complex and come with a high risk of losing money rapidly due to leverage. These products may not be appropriate for every investor. You should carefully assess whether you understand how these leveraged products operate and whether you can tolerate the high risk of losing your money. PXBT Trading Ltd does not serve clients from Restricted Jurisdictions as listed on its website.