At Cheshire Gold Xchange, we have been busier than ever! Largely assisted by the fact gold prices have continued to run and reach new all-time highs in October 2024. This price run has been driven by various global economic and geopolitical factors. Many people are now asking us, “Will the gold price keep rising? Should I sell my gold now? Or should I be buying more gold?” We will explore the current pricing situation based on current market conditions and expert forecasts.
There are numerous global factors that have pushed the gold prices to record levels.
1. Geopolitical tensions As reported by JP Morgan, gold traditionally has the reputation of being a safe-haven asset. When global uncertainty arises, we often see many turning to gold as a safe investment. Escalating geopolitical risks such as wars and economic sanctions have driven demand as investors seek out security in physical, tangible assets.
2. Central Bank Buying Countries with emerging markets have been focused on buying gold to diversify reserves away from the US dollar. In 2023, global central banks bought over 1000 tonnes of gold, with no expectations of buying slowing down in 2024. This reinforces the long-term view that the upward gold price trend will be sustained.
3. Interest Rate Forecasts Traditionally, when we see lower interest rates and a weaker dollar, this boosts gold’s appeal. The speculation of a Federal Reserve rate cut in late 2024 has fuelled further gains. Even though we have seen a decoupling between real yields and gold, markets are still expecting falling rates will continue to provide upward momentum.
4. Inflation Hedging With inflation still above targets in numerous major economies, gold serves as a hedge against this. Investors are using gold to protect purchasing power, which maintains its demand during periods of economic instability.
Many experts are suggesting that gold could continue its upward trend, but there are several variables that need careful consideration:
Fed policy changes JP Morgan had originally forecast that gold price per ounce would hit £1,930 per ounce by the end of 2024. In October 2024, we have already surpassed this prediction, hitting £2,111 per ounce at the time of writing this article. JP Morgan’s price prediction was based upon the expectation the Federal Reserve would cut rates as anticipated. However, if inflation cools faster than expected or the Fed changes course later in the year, this could impact further gains on this price.
Central Bank Activity: The continuation of central bank purchases will continue to hold the high floor price of gold. If we see buying start to slow or other macroeconomic conditions shift, this could place downward pressure on the gold price.
Geopolitical Stability: The current geopolitical environment remains a key factor. Gold tends to perform well during instability, and as long as tensions persist, the outlook remains bullish. However, any sudden resolution or easing could change the price trajectory.
Some people may feel hesitant buying gold now with its inflated price, whereas some retail buyers may have the ‘FOMO’ feeling and want to jump in to try to catch a wave regardless of how stretched the price currently is. Deciding whether to invest in gold at these high levels depends upon your investment goals, risk profile, and time frame.
When investing in physical gold, it’s important to remember there is a price spread from buying gold retail and selling to a UK gold buyer like ourselves. There is a profit above the gold spot price retailers allow for when buying bullion, and there is a profit margin allowance below spot price for gold buyers.
1. Long-Term Hedge – If you are looking to hedge against long-term risks like inflation or currency devaluation, adding gold to your portfolio can be a good move. Central banks and institutional investors remain active buyers signalling future demand stability.
2. Short Term Volatility – Buying at peak price levels always carries risks. With the gold price continuing to trend upwards, the chance of a price pull-back or correction becomes more likely. The gold price may fluctuate based on news events and unexpected Fed policy. Those looking to buy gold with a short-term outlook should be mindful of these risks and the potential for price volatility.
3. Diversification: Gold can form part of a diversified investment portfolio. It often moves independently from other asset classes, which can reduce overall portfolio risk. For those seeking balance, adding some exposure might be worthwhile, but it’s wise to avoid over-concentration.
J.P. Morgan We have discussed JP Morgan’s price forecasts for gold prices averaging around £1,930 per ounce by the end of 2024 and rising further in 2025. We have now seen these forecasts beaten already in 2024. They cite ongoing central bank purchases and inflation hedging as primary drivers. However, they also note the potential risks if the Fed’s rate cuts don’t materialize as planned.
Axi and other analysts also project that while the structural factors supporting gold’s rise remain strong, the market could experience short-term pullbacks if inflation data improves or if geopolitical risks reduce. For inexperienced retail buyers, timing your entry is crucial, as any dip or price pullback could provide a better buying opportunity.
With gold prices in 2024 already beating expert forecasts, it may be considered a very good time to sell gold bullion as the gold price could be seen as overbought. You might now be wondering if now is a good time to cash your gold in. We believe it may be, and here is why:
Maximise Returns: Gold’s current peak price offers an excellent opportunity to lock in extra profits, especially if you have bought your gold as an investment purchase at lower price levels. As is thought by many investors, you should always look to sell high and buy low. Gold is trading at historical highs due to a mix of economic and geopolitical factors. If selling gold at an all-time historic high is not a good time to sell, when is?
Short-Term Uncertainty: While the overall long-term outlook for gold is positive, we are seeing potential for short-term volatility. Any large news event, or shift in US monetary policy, could lead to a quick price drop as sentiment towards gold changes. If central banks slow their buying, or if inflation comes under control faster than expected, the bullish momentum in gold might cool off. Selling your gold now avoids the risk of trying to sell into price corrections not achieving a lower price. Gold buyers may be hesitant to pay top prices if the gold price is on a downward trend.
Rebalancing Your Portfolio: If a large portion of your investment portfolio is tied up in gold, now might be a good time to rebalance. With gold prices at an all-time high, taking some profit off the table and diversifying into other asset classes could help protect your gains and reduce risk. This is especially useful if you’re concerned about potential short-term volatility.
Liquidity Needs: If you need immediate liquidity, selling at peak prices can give you a significant financial cushion. Gold has always been a strong store of value, and cashing out when prices are high means you can access that value when needed.
It’s exciting times in the world of gold, as it reaches new highs. For those considering buying gold as an investment, it’s crucial to evaluate the timing and try to time your entry on a price dip. We believe selling your unwanted gold right now might be an opportune moment to lock in profits, especially if you’re concerned about short-term volatility. All our advice is subject to your own financial goals. At Cheshire Gold Xchange, we retail a large selection of investment bullion, as well as buy all gold items, so if you are looking to sell Royal Mint gold coins or sell your old gold jewellery, you can use our scrap gold price calculator to get an instant price offer.
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