Gold should shine this year.
Last trading at $2,045, it could potentially see $2,500 this year. All thanks to potential interest rate cuts from the Federal Reserve, rising geopolitical tension, and strong demand from central banks all over the world.
For one, if the Fed does lower rates as promised, gold becomes far more attractive. Two, with rising tension in the Middle East, gold will become a safe haven trade. For example, when the war broke over Ukraine and the Israel-Gaza situation, investors sought safety in gold.
Three, election year results could influence gold prices too. In fact, according to Deseret News, “Democratic presidential election wins led to an average gold price increase of 1.5%, while Republican wins brought a 5.5% decrease on average.” Global central banks have also been buying a good deal of gold.
All this should serve as strong catalysts for gold stocks such as Barrick Gold (GOLD), which carries a yield of 2.29% at the moment.