Open account
☰
Open account
✖

Gold in 2024: Records, Risk, and a Break from Old Relationships

Article By: ,  Market Analyst
December 30, 2024 1:30 AM
  • Gold near top of 2024 asset class returns despite strong dollar
  • Correlations with Nasdaq and bitcoin outshine traditional drivers
  • Bias remains to buy dips as higher lows reinforce bullish momentum

Overview

A stronger dollar and elevated US bond yields is an environment rarely enjoyed by gold bulls, but not this year. Instead, bullion has marched higher, setting multiple records and sitting near the top of year-to-date returns for major asset classes. It’s been as remarkable as it’s been relentless, making it my biggest market surprise of 2024.

Of course, geopolitical tensions in Europe and the Middle East may explain some of the outperformance, but one glance at the following chart suggests gold has been less of a safe haven and more of a long duration risk play this year.

Gold: Safe haven or risk asset?

Source: TradingView

The rolling weekly correlation over the past year with Nasdaq and bitcoin futures sits at at 0.82 and 0.62 respectively, far stronger than with traditional drivers like the US dollar and real, inflation-adjusted 10-year Treasury yields. As a metal offering no yield and quoted in US dollar terms, gold often has an inverse relationship with those variables.

However, with weekly correlation coefficient scores of 0 and -0.14 in 2024, traditional relationships have been nowhere to be seen, continuing the pattern established since the coronavirus pandemic.

Gold has seen a loose inverse relationship with short end US Treasury yields, suggesting the Fed monetary policy outlook may be having some influence on the price action, but the influence of long end yields and longer-term US inflation expectations have been non-existent.

Whether due to concerns about the fiscal trajectory in developed nations, a method to diversify away from the US dollar or a way to circumvent capital controls, or even other factors, the gold game looks to have changed.

Bias remains to buy gold dips

Source: TradingView
While gold remains below the record high of $2790 set in October following a steep reversal from $2724.80 in early December, the series of higher lows on the weekly timeframe reinforces the bias to buy dips towards known support levels when they occur.

The April 2024 uptrend is one such level with $2531.80 and $2480 the next after that. On the topside, $2724.80 and $2790 are initial resistance levels of note.

 

-- Written by David Scutt

Follow David on Twitter @scutty

 

How to trade with City Index

You can trade with City Index by following these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the market you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

© City Index 2025