①Since the beginning of this year, the price of New York gold futures has surged by nearly 71%, on track to record the best annual gain in 46 years; ②The 71% increase significantly outperforms the S&P 500 Index, which has risen by only 18%.
$XAU/USD (XAUUSD.CFD)$ is experiencing its best performance year since 1979. Since the beginning of this year, the price of New York gold futures has surged nearly 71%, on track to record the largest annual gain in 46 years.
At the beginning of this year, the price of gold futures was approximately $2,640 per ounce. On Monday this week, the price of gold once broke through the historical high of $4,500 per ounce.
The 71% increase significantly outperforms the S&P 500 Index, which has risen by only 18%. In 2024, gold futures increased by 27%, while the S&P 500 Index rose by 24%.
The last time gold exhibited such a strong annual performance, the U.S. President was Jimmy Carter. At that time, the Middle East was in turmoil, inflation was surging, and the United States was deeply mired in an energy crisis.
This year, tariffs have disrupted international trade, the conflict between Russia and Ukraine has continued to escalate, tensions between Israel and Iran have flared up multiple times, and the United States seized oil tankers off the coast of Venezuela.
During periods of high uncertainty, investors tend to turn to safe-haven assets such as gold. Gold is considered a resilient investment tool, with investors generally believing that this metal can maintain its value during crises, soaring inflation, or currency depreciation.
Joe Cavatoni, Senior Market Strategist at the World Gold Council, stated: 'Uncertainty remains a prominent feature of the global economy. In such an environment, gold is becoming increasingly attractive as a strategic diversification tool and source of stability.'
For some investors, the drawback of gold is that it does not generate interest income like bonds. However, when the Federal Reserve cuts interest rates as it has in recent months, bond yields typically decline, thereby enhancing the relative attractiveness of gold.
Gold is poised to maintain its strength.
The strong performance of gold has also driven up other precious metals, including silver, platinum, and palladium. Since the beginning of this year, silver futures have surged 146%, platinum futures have risen nearly 150%, and palladium futures have increased by 100%.
Hakan Kaya, a portfolio manager at Neuberger Berman, stated that precious metals are 'a hedge against an increasingly uncertain world' for investors.
This trend is likely to continue.
Ulf Lindahl, CEO of Currency Research Associates, predicted that gold prices still have upside potential until 2026. As central banks increase their gold reserves, the amount of bullion available in the market may decrease; with rising demand from ordinary investors and constrained supply, prices could climb further.
Matt Maley, Chief Market Strategist at Miller Tabak + Co., pointed out that concerns over massive government fiscal deficits and debt burdens are also driving up demand for precious metals.
‘As investors become increasingly aware of these issues, they are viewing gold as an important safe haven,’ said Maley.
Analysts at JPMorgan expect gold prices to rise above $5,000 per ounce by 2026.
Editor/Doris