Gold Outperforms Stocks and Bank Deposits in 2024

Gold has emerged as a top-performing asset in 2024, outshining both stocks and bank deposits. As of 9 a.m. ET, the price of gold traded at $2,385.61 per troy ounce, marking a 0.10% increase from the previous day and a 15.45% rise since the beginning of the year. The precious metal's 52-week intraday high reached $2,431.51 on April 12, 2024, while its 52-week intraday low was $1,810.47 on October 6, 2023.

Persistent inflation and global uncertainty have driven the demand for gold to new heights, with the metal setting a new all-time high of over $2,400 per ounce. Over the past five years, gold has climbed an impressive 81.65% compared to the S&P 500. Wholesale giant Costco is reportedly selling up to $200 million worth of gold bars every month in the United States, a significant increase from the previous year's sales of $100 million per quarter.

Central banks around the world have also been accumulating large quantities of gold, with 1,136 metric tons purchased in 2022, the highest level since 1950. China's central bank alone has added 160,000 troy ounces to its reserves, marking the seventeenth consecutive month of additions. The strong performance of gold is attributed to its enduring value, historical significance, and application in various technologies, as well as its status as a "safe haven asset" during periods of economic uncertainty.

Why this matters: Gold's record-breaking performance in 2024 highlights its role as a reliable store of value and a hedge against inflation and economic instability. The increased demand from both individual investors and central banks underscores the growing importance of gold in the global financial landscape.

For investors looking to gain exposure to gold, there are several options beyond buying physical bullion, including gold futures and options, gold mutual funds, gold certificates, gold mining stocks, and gold ETFs like the iShares Gold Bullion ETF (TSX: CGL). These alternatives provide investors with the ability to participate in the gold market without the need to physically own and store the precious metal. Analysts remain optimistic about gold's outlook, with some predicting prices could climb even higher, potentially reaching $3,000 per ounce.

Despite the rise in gold prices, gold stocks remain undervalued compared to their technicals and fundamentals. West Red Lake Gold Mines Ltd., a company focused on advancing its high-grade Madsen Gold Mine in Ontario's Red Lake District, has reported noteworthy drill results from the high-grade South Austin Zone and aims to restart gold production at the Madsen Gold Mine by 2025. As investors seek to protect their wealth during economic downturns, gold continues to prove its value as a reliable safe haven asset.

Key Takeaways

• Gold prices hit record highs in 2024, outperforming stocks and bank deposits.
• Persistent inflation and global uncertainty have driven demand for gold to new heights.
• Central banks around the world have been accumulating large quantities of gold.
• Investors can gain exposure to gold through various options beyond physical bullion.
• Gold stocks remain undervalued compared to their technicals and fundamentals.