Gold outperformed most assets in 2023, weathered various headwinds in early 2024 and has now been climbing since March. Multiple gold price records have been set and quickly broken. Price gains were not a given: normally gold prices are negatively correlated with capital market interest rate expectations, so if they rise (as recently), gold prices tend to fall and vice versa. We look therefore at multiple other factors that have come together to drive the gold price up, including central bank buying, Chinese retail demand and geopolitical risks.  

In this report, we explain why we see further upside potential for gold in the medium term – even if the strong recent upward momentum in prices could now cool down somewhat.

Key takeaways:

  • In a spectacular rally at the beginning of March, gold prices rose for eight days in a row, reaching one record high after another. In April, prices rose even to USD2,431/ounce. 
  • Many market players were not strongly positioned on the buying side, as prices briefly fell below the USD2,000/ounce mark in mid-February because of the U.S. Federal Reserve's initial interest rate cuts being heavily priced out.
  • While we had already expected a sizeable rise in gold prices in our annual outlook, we now continue to see noticeable price potential due to the exceptionally strong demand from central banks and Asian retail investors. In the very short term, prices could initially consolidate at a high level.
  • We consider a 5 to 10% gold allocation of the portfolio to be useful to reduce portfolio volatility and enhance overall returns over the next 12 months. 


The CIO Viewpoint below is available to download. Please refer to the Important Information at the end of the memo for disclosures and risk warnings.



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