CME Group: Gold Is Breaking Out, What’s Next?

Gold has been outperforming the overall stock market in 2024. And since markets have started to trend lower in recent weeks, gold has held its gains. And it’s even hit new all-time highs in the U.S. dollar, topping $2,400 per ounce.

Several factors are at play that could allow the metal to perform even better in the months ahead. With the asset breaking higher on a technical basis, further momentum appears likely.

What’s driving the metal higher? A combination of supply and demand.

Right now, demand is the largest factor.

Central banks continue to be net buyers of the metal. They’re looking to diversify their reserves. And do so with an asset that isn’t likely to face sudden devaluation, like another country’s currency.

Plus, geopolitical tensions have been on the rise. Iran’s direct attack against Israel led to classic “risk-off” market actions. That includes selling assets like growth stocks and buying defensive assets like gold.

Even if those tensions subside, inflation looks like it may be higher for longer. Some investors are even worried about “double-dip” inflation akin to the 1970’s.

In that scenario, gold could be a massive winner. However, it’s too soon to tell if that’s the case yet.

With gold in a bullish technical trend, the metal has more upside. And it’s likely that gold-related trades like the miners have further upside too.

To watch the full case for gold’s breakout, click here.