The Gold Price Journey Through 2024: From $2,000 to Historic Highs

The precious metal experienced a remarkable rally throughout 2024, with gold prices climbing from approximately US$2,000 per ounce at the start of the year to nearly US$2,800 as the year concluded. This substantial appreciation in gold price 2024 was propelled by multiple converging factors spanning monetary policy, international tensions, and shifting investor sentiment. Understanding what moved gold prices in 2024 provides valuable context for market participants evaluating their portfolio positioning heading into 2025.

What Propelled Gold Prices Higher in 2024

The primary drivers reshaping gold price dynamics throughout 2024 included aggressive interest rate cuts from the US Federal Reserve, escalating geopolitical tensions spanning Eastern Europe and the Middle East, and growing uncertainty clouding global financial markets. The Federal Reserve’s decision to reduce rates by 75 basis points over the course of the year fundamentally altered the calculus for gold, which typically appreciates when real returns on competing assets diminish.

Central bank purchasing patterns emerged as perhaps the most significant force anchoring gold prices upward. Institutions worldwide, led by China’s acquisitions of 22 metric tons during the first two months alone, systematically accumulated physical gold. The People’s Bank of China maintained active purchasing momentum, while Turkey, Kazakhstan, and India similarly increased their holdings substantially. Chinese wholesale demand surged to 271 metric tons in January 2024 — the strongest reading on record — as investors fled deteriorating real estate and stock valuations. Chinese equities had surrendered nearly US$5 trillion in value over the preceding three-year period, intensifying demand for the precious metal as a defensive hedge.

However, not all 2024 saw steady appreciation. Following Donald Trump’s triumph in the US presidential election, gold experienced price volatility as capital rotated toward Bitcoin and risk assets. Despite these periodic headwinds, the structural factors supporting higher gold prices ultimately prevailed, with the metal finishing the year with nearly 40 percent appreciation.

How Gold Prices Evolved Across Each Quarter of 2024

Gold’s quarterly performance painted a picture of sustained strength punctuated by corrections. During the first quarter, the precious metal reached its initial record high of US$2,251.37 on March 31, 2024. Central bank purchases provided consistent underpinning, with demand particularly robust in January and early February as geopolitical uncertainties and economic fragility pushed wealth toward safe-haven assets.

The second quarter witnessed accelerating momentum, culminating in an all-time high of US$2,450.05 by May 2024. This advance was reinforced by forward guidance from the Federal Reserve in late February signaling expectations for three to four rate cuts during 2024. The resulting repricing of monetary policy expectations triggered both short-covering activity and momentum-driven buying that propelled prices sharply higher. Notably, investor sentiment began rotating back into gold during this period, with Western-domiciled exchange-traded funds reversing previous outflows. SPDR Gold Shares (NYSE: GLD), Sprott Physical Gold Trust (NYSE: PHYS), Royal Mint Responsibly Sourced Physical Gold ETC (LSE: RMAU), and UBS ETF Gold (SWX: AUUSI) all experienced inflows, even as European-focused funds continued experiencing redemptions.

The third quarter delivered yet another record, with gold approaching US$2,672.51 on September 26, 2024, immediately following the Federal Reserve’s announcement of a jumbo 50 basis point rate reduction. Although the People’s Bank of China took a pause from direct purchases in Q3, regional banks received fresh import quotas in August, maintaining underlying demand firmness. Central bank activity during the quarter added 186 metric tons to global reserves, with Poland’s central bank leading with 42 metric tons added to its coffers.

As 2024 concluded, the fourth quarter proved volatile yet ultimately supportive of higher prices. The quarter commenced near US$2,660, quickly retreating to US$2,608.40 on October 9 before rebounding sharply. A softer-than-anticipated September consumer price index reading, showing annual inflation of 2.4 percent versus the forecast of 2.3 percent, bolstered expectations that the Federal Reserve would cut rates at its November meeting. Gold surged to a new quarterly record of US$2,785.40 on October 30.

The election of Donald Trump triggered a pullback to US$2,664 on November 6, 2024. However, the Federal Reserve’s 25 basis point rate cut on November 7 provided support, sending prices briefly above US$2,700. By mid-November the precious metal had corrected to US$2,562.50, its quarterly low, before recovering to near US$2,715.80 by month-end. December witnessed further consolidation, with prices ending the year around US$2,660.

Central Bank Buying: The Dominant Force Behind Gold Price Trends

Market observers increasingly recognize that central bank accumulation, rather than interest rate movements alone, has become the primary determinant of gold price direction since roughly 2009. David Barrett, CEO of EBC Financial Group’s UK operations, emphasized this dynamic: central banks function as permanent buy-and-hold market participants whose purchases remove supply from available markets, fundamentally altering supply-demand dynamics.

The World Gold Council’s tracking data reveals the magnitude of this phenomenon. On a rolling four-quarter basis, central bank gold purchases totaled 909 metric tons through the third quarter of 2024, compared to 1,215 metric tons one year prior. While this represents a deceleration, the continuing accumulation remains robust by historical standards, with central banks adding 186 metric tons specifically during Q3 alone.

This sustained appetite reflects a broader macro shift: as political polarization intensifies globally and economic fragility persists, institutions view gold as essential portfolio insurance. The precious metal’s appeal as a diversification tool and risk mitigation asset has compelled central banks to maintain their buying despite rate considerations that might ordinarily weigh against accumulation.

Geopolitical Escalation and Safe-Haven Demand

Beyond monetary policy, geopolitical instability proved critical to sustaining gold price momentum through 2024. The Russia-Ukraine conflict intensified dramatically in Q4 when the US authorized Ukraine to deploy ATACMS long-range missiles targeting Russian territory on November 17, 2024. The UK and France quickly followed, providing similar authorization to Ukraine. These developments triggered escalatory rhetoric from Russia, which announced plans to lower the threshold for nuclear retaliation to encompass conventional attacks from nations backed by nuclear powers.

On November 21, 2024, Russia conducted its first operational test of an intermediate-range ballistic missile, though the demonstration carried inert warheads. The incident underscored the growing risk of major military escalation, a development that historically strengthens demand for gold as investors seek refuge from geopolitical uncertainty. This dynamic provided valuable support for gold prices precisely when other factors might have weighed against higher valuations.

Gold Mining Consolidation and Industry Restructuring

Beyond price dynamics, the gold sector itself experienced significant merger and acquisition momentum during 2024. South Africa-based Gold Fields announced its intention to acquire Canada’s Osisko Mining (TSX: OSK) for C$2.16 billion. Simultaneously, AngloGold Ashanti (NYSE: AU) agreed to purchase UK-headquartered Centamin (TSX: CEE) for US$2.5 billion. These transactions signal confidence among major producers regarding sustained demand for gold production and the economic viability of expansion at current price levels.

Looking Ahead: The Outlook for Gold Prices

As 2024 concluded and 2025 commenced, multiple uncertainties loom regarding gold’s next chapter. The incoming Trump administration brings questions about monetary policy trajectory, with potential inflation implications if proposed economic policies prove inflationary. Simultaneously, his stated preference for more protectionist trade policies could disrupt global financial markets and currency relationships, potentially driving additional safe-haven demand for gold.

The gold price 2024 story ultimately reflects a complex interplay between monetary accommodation, geopolitical anxiety, and central bank conviction that physical precious metals warrant sustained accumulation. Investors navigating 2025 would be prudent to recognize that these same forces remain embedded in the macro landscape, continuing to shape gold price trajectories as the new year unfolds.