On 12 April 2024 gold hit an all-time high of $2,431 an ounce, above $2,400 for the first time, in a month of records. What explains it and what to know if you have exposure to the metal.
On Friday 12 April 2024 gold hit an all-time high of $2,431.29 an ounce in the spot market, according to Reuters, and broke through the $2,400 barrier for the first time. It was not an isolated event: on 9 April the metal had already recorded its eighth consecutive record session, at $2,365, and April had begun with the price above $2,200, according to the Perth Mint.
What has pushed the price
The sources point to several factors at once. The first is geopolitical: reports of a possible Iranian attack on Israel, after the strike earlier in the month on the Iranian diplomatic compound in Damascus, attributed to Israel, increased demand for safe-haven assets. A US official said an Iranian attack was expected, though not on a scale that would draw Washington into a war. Between 13 and 14 April, Iran launched drones and missiles at Israel, shortly after gold hit its high.
The second factor is central-bank buying. The People’s Bank of China raised its gold reserves in March for the 17th consecutive month, by about 160,000 ounces, to 72.74 million ounces, according to data from its foreign-exchange regulator. Bank of America analysts also cited strong demand from central banks and Chinese retail buyers. In China, physical gold premiums rose on strong demand, while high prices cooled activity in India, according to Reuters.
The third is inflation data and rate expectations. A higher-than-expected US CPI reading for March on 10 April, and a softer producer price index on the 11th, kept alive the question of when the Federal Reserve will cut rates. Analysts quoted by Reuters also spoke of funds following price momentum and of fear of missing out. Other metals joined in: silver rose 3% to $29.33 an ounce, its highest since early 2021, and platinum came close to $1,000.
What to bear in mind
A record is a fact about the past and does not indicate where the price will go. On the same day, 12 April, gold fell almost 1.5% from its high to about $2,337, according to CNBC, and US futures ended the session at $2,374. Gold is priced in dollars and moves quickly on geopolitical news, inflation data and central-bank decisions, and those moves can reverse when tensions ease.
Anyone with exposure to gold, whether in bars or coins, in exchange-traded funds or in commodity baskets, can review how much it weighs in their overall wealth, in which currency it is quoted, how it is held and what the tax consequences are. For those investing from the euro area, the price in euros also depends on the euro–dollar exchange rate, so the metal can move differently in each currency.
Why the figures differ
The highs of the day vary by source and instrument: the spot price, futures and the London fixings do not coincide. On 12 April, Reuters put the spot high at $2,431.29, while the Comex future traded as high as $2,448.80, according to Kitco’s analysis. Intraday figures are also provisional, and it is worth always citing the source and the instrument. Ask your financial adviser how it applies to your case.
A price record tells you what has happened, not what will happen.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
