This has also been the strongest year for gold since 2010, with the outlook for 2025 still remaining bullish.

Reasons why gold has risen in 2024

There are a total of 3 factors. They are as follows:

1) Rising geopolitical risks

The tensions in the Middle-East between Israel and proxies of Iran, the Russia-Ukraine war, and the fall of Bashar al-Assad's regime in Syria have all increased gold demand since gold is viewed as a safe-haven asset.

2) Central banks are buying gold

According to the report, central banks have been net buyers of gold for almost 15 years now, and this has increased since 2022-23.

3) US Fed rate cuts

The recent rate cut by the US Federal Reserve has also made gold more attractive by reducing the opportunity cost of holding bullion.

On top of this, Fed chair Jerome Powell has also said that the Fed will cut rates twice next year, with inflation softening but still above the target. European central banks may also likely cut rates by a similar amount.

How is gold likely to perform in 2025?

"A similar rally could occur in 2025, but this will largely hinge on geopolitical developments," a report by news agency Reuters quoted Zain Vawda, market analyst at MarketPulse as saying.

He projected a base price for gold to be at $2,800/oz.

Meanwhile, UBS forecasts gold reaching $2,900/oz by the end of 2025 while Citi, Goldman Sachs and JPMorgan are seeing a target of $30,00 by December 2025, according to the report.