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The momentum propelling gold to a record $2 135.40 per ounce recently may fizzle short term, due to uncertainty over the timing of US monetary easing, but wider geopolitical risks should also drive further gains towards fresh peaks, analysts said.

Safe-haven inflows driven by war in Ukraine and the Middle East, coupled with bets for a cut in US interest rates – making zero-yield gold more attractive than competing assets such as bonds and the US dollar – have driven a more than 10% rise in bullion prices.

Gold vaulted on a more dovish tilt by the Federal Reserve, but has since given up some of those gains.

“Bullish expectations have been brought forward into the first quarter of 2024 but it is not going to be a straight line to revisit the all-time peak again,” said Nicky Shiels, head of metals strategy at MKS.

Steady central bank purchases led by China have also supported gold this year and this should continue next year, analysts noted.

Holdings in the largest gold-backed exchange traded fund (ETF), the SPDR Gold Shares ETF GLD.N, posted net inflows of over $1-billion in November, the most since March 2022.

However, most analysts have highlighted that prices will pull back near-term, before resuming the climb next year to target $2 150 to $2 300 per ounce.

Gold has been known to price in monetary policy expectations prematurely over the past two years. While we expect the Fed’s next move to be a rate cut, we do not expect it to materialise immediately,” Standard Chartered analyst Suki Cooper said.