Gold prices soared past $4,600 an ounce on Friday, marking the metal’s highest level in three months and capping one of the strongest weekly performances in 2024. The advance came as a softer U.S. dollar and renewed concerns around America’s fiscal outlook drew investors back to defensive assets.
Weaker dollar, fiscal concerns spark demand
Spot gold climbed to $4,620.14, rising more than 5% this week according to Reuters, while U.S. gold futures moved above $4,670. The dollar declined by nearly 1% over the same period, making gold less expensive for international buyers and boosting overall demand.
Investor focus has shifted back to U.S. borrowing, particularly as federal debt surpassed $40 trillion. Treasury Secretary Scott Bessent decided to increase buybacks of longer-term government bonds, which briefly alleviated pressure in the bond market. However, this move also fueled debate about the scale and sustainability of U.S. government financing needs.
A breakout above gold’s 200-day moving average at $4,513 triggered further buying momentum, bringing an end to several months of volatile price action and reinforcing the bullish mood in precious metals markets.
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Professional investors appear increasingly optimistic about gold’s prospects. In Bank of America’s latest fund manager survey, a net 16% of respondents described gold as undervalued, compared to just 6% in July. This marks the highest reading since March 2023, signaling a growing appetite for the asset even as equity markets remain dominant in broader positioning.
Despite continued allocations to stocks, gold’s renewed momentum suggests investors view the metal as a key portfolio hedge rather than simply reacting to broad market risk aversion.
Gold, Bitcoin, and the rise of real-world asset tokenization
Gold’s latest rally has reignited comparisons to Bitcoin, with both assets often discussed as inflation hedges and alternative stores of value. Research has previously suggested that Bitcoin and gold may respond differently to market turmoil, highlighting the importance of asset diversification.
In recent sessions, both Bitcoin and gold have rallied in parallel, while major equity benchmarks have struggled. This divergence is drawing investors’ attention toward scarce assets amid ongoing worries over inflation, currency weakness, and fiscal policy.
Amid these shifts, traditional financial practices are experiencing rapid transformation. While brokers have long acted as intermediaries in traditional markets, platforms such as 1stepSwap now allow investors to directly hold tokenized real-world assets, including shares of leading U.S. companies as well as gold and silver, in their crypto wallets. By automatically seeking the best available prices and removing intermediaries, these platforms are bringing Wall Street processes into the Web3 era.
Precious metals rally and future outlook
Gold was not alone in Friday’s advance. Silver jumped above $69 an ounce, while platinum and palladium also posted gains. The rally signals renewed investor interest in physical precious metals beyond gold.
Long-term forecasts for gold remain positive, though there is little consensus among analysts. Earlier this year, JPMorgan projected gold could rise as high as $6,300 before year-end. Other banks have cautioned that a rebound in interest rates or an easing of geopolitical tensions could limit further price increases.
Bank of America’s latest fund manager survey showed a net 16% of respondents now view gold as undervalued, a substantial rise from just 6% in July and the strongest result since March 2023. This shift comes even while investor allocations to equities remain high, suggesting gold is increasingly seen as a portfolio hedge.
Central banks’ ongoing purchases continue to provide structural support for the gold market, reinforcing the metal’s position as a strategic reserve asset for countries worldwide.
