Gold's Gleaming 2024: A Bull Market Fueled by Geopolitical Risks and Central Bank Demand

The gold market in 2024 saw a significant uptick, with a 27% return, driven by geopolitical risks and central bank demands. MUFG Bank predicts this bullish trend will persist into 2025, despite a more cautious outlook for energy and agricultural commodities due to geopolitical and environmental factors.

The gold market displayed remarkable strength throughout 2024, yielding impressive returns for investors. The precious metal recorded approximately 27 percent returns this year, as per publicly available data, and is anticipated to continue its upward trajectory into the New Year.

Japan's MUFG Bank, a leading global banking institution, in its recent report, projected the bull run in gold to persist through 2025. The bank cited two primary drivers: geopolitical risk hedging and increasing demand from central banks in emerging markets. The report, titled 'Commodities 2025 Outlook: Stay Selective, Hedge Trump-Induced Tail Risks,' emphasized that gold's continued bull market is their strongest conviction, bolstered by the interplay of geopolitical instability and wealth accumulation trends.

Factors such as monetary institution demand, investor speculation, and US policy uncertainties enhance the attractiveness of gold. Central banks worldwide have fortified their gold reserves amid ongoing geopolitical tensions. The MUFG report remains neutral-to-bearish on energy, forecasting potential risks in oil prices due to supply surges, possible tariffs, and technological shifts in China. Agricultural commodities face volatility related to US trade policies and geopolitical developments, yet remain buffered by low inventory levels. (ANI)

(With inputs from agencies.)