In 2024, gold commemorates its twenty-fifth year since reaching a low of $252.50 per ounce in 1999 before embarking on an upward trajectory. As of January 2, nearby COMEX gold futures were valued at $2,075.20, and on February 1, the April contract hovered around $2,078.

A Quarter-Century Bull Market

Gold’s significant rally commenced after hitting a notable bottom twenty-five years ago. The chart analysis underscores the 1999 low of $252.50, which marked a turning point as gold consistently formed higher lows and higher highs. Since surpassing the 1980 all-time high of $875 in 2008, gold has not dipped below $1,000 per ounce since 2009 and has maintained levels above $2,000 per ounce in 2024.

Bull Markets and Corrections

While bull markets often encounter substantial and prolonged corrections, gold has experienced periodic setbacks. The twenty-year chart analysis highlights a 45.3% correction from $1,911.60 in September 2011 to a low of $1,046.20 in December 2015. After reaching a new high of $2,063 in August 2020, gold underwent an 18.9% correction to $1,673.70 in March 2021. Further corrections and rallies have followed, emphasizing the non-linear nature of gold’s upward trajectory.

Gold’s Low Volatility and Financial Role

Gold, operating as both a currency and a commodity, exhibits low volatility. The monthly chart analysis indicates historical volatility below 13.4% as of January 2024, contrasting with the dollar index’s 6.6% historical price variance. Gold’s dual role as a financial asset and a commodity contributes to its low price variance, especially compared to more volatile assets like crude oil.

Strategic Approach: Buying on Dips and Profit-Taking

The recommended strategy involves capitalizing on price weaknesses throughout gold’s twenty-five-year bull market. Buying during selloffs has proven advantageous, with periodic dips representing golden opportunities to accumulate the metal. Optimizing investment results involves selling a portion of the long position when gold reaches new record highs, creating room for subsequent corrections.

Expectations for 2024

As 2024 marks the silver anniversary of gold’s bull market, predictions favor another high later in the year. Several factors support the expectation of higher gold prices:

• Geopolitical turmoil tends to elevate gold as a safe-haven investment.
• Gold’s fungibility and sanction-proof nature contribute to its appeal.
• A stable to falling U.S. interest rate environment may impact the U.S. dollar’s value, historically inversely correlated with gold.
• Global central banks’ ongoing accumulation of gold reserves reinforces its role in the financial system.
• Gold’s rare combination of industrial and financial characteristics positions it uniquely in the market.

Conclusion

The bullish trend in gold appears steadfast, with no apparent signs of reversal. The enduring strategy of buying on price weakness, with a potential opportunity if gold drops below $2,000 in early 2024, continues to be a favored approach. Geopolitical factors, central bank actions, and gold’s unique attributes collectively contribute to a positive outlook for gold prices in the coming months and years.

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