Gold prices hit new highs in 2023! Is it still worth investing in gold in 2024?

January 05, 2024

For Chinese investors, although the stock market is sluggish in 2023, the gold market is like a shot in the arm - from the beginning to the end of the year, the world gold price has repeatedly hit new highs and has been oscillating at a high of $2000 per ounce.

In 2023, gold performed exceptionally well and stood out in a high interest rate environment, outperforming commodities, bonds, and most stock markets. Why can the world gold price remain so strong in a market environment where uncertainty remains undiminished?

According to data from the World Gold Council, global gold demand remained stable in the first three quarters of 2023 and exceeded the average level of the past decade, mainly due to net purchases by central banks and the development of the manufacturing industry. Especially, the gold subsidy from central banks around the world continues to increase and has reached a high level. Among them, China, India, Bolivia, and Singapore have become the main countries purchasing gold in 2023.

Juan Carlos Artigas, Global Research Director of the World Gold Council, stated that gold, as a reserve asset, has the characteristics of safety, liquidity, low volatility, and good returns. It can help holders hedge risks, effectively improve the performance of investment portfolios, and provide investors with stable and high returns. "This is also an important reason why the central bank has been continuously purchasing gold for over a decade."

The 2023 global central bank gold reserve survey results show that over 70% of surveyed central banks expect global gold reserves to increase in the next 12 months. Factors such as interest rates, inflation levels, geopolitical risks, the multipolar trend of the global reserve currency system, and ESG are the main driving factors for central banks to continue purchasing gold in the future.

"The trend of de dollarization in 2023 is obvious, and this trend will continue until 2024." Chen Wenling, chief economist of China Center for International Economic Exchanges and deputy director of the Executive Board, believes that in recent years, with the increase of the US debt crisis and financial risks, more and more countries begin to question the US dollar credit.

By December 2023, the total amount of US treasury bond will reach US $300 million, accounting for 11% of the total global debt and 150% of the total domestic debt. About 18% of its fiscal revenue will be used to pay debt interest. In addition, US household debt has reached $17.06 trillion. Chen Wenling stated that under the superposition of various risks, "de dollarization" has become a major trend in the long term.

From a practical perspective, currently, central banks around the world are silently increasing their holdings of gold and diversifying their reserve currencies, becoming practitioners of de dollarization. According to a survey by the World Gold Council, most central banks believe that US dollar assets will decrease and Chinese yuan assets are expected to double in terms of future reserve allocation. In addition, due to its good performance in high-risk environments and ability to diversify geopolitical risks, many emerging countries view gold as a tool for long-term value preservation and diversified investment. "In the future, emerging and developing markets are more likely to significantly increase the proportion of gold in reserves, using it as a means of neutralization and protection." Ankai said that in the long run, global central banks and official institutions' demand for purchasing gold has doubled, which has brought important benefits to the gold market.

In addition to being an important component of the central bank's foreign exchange reserves, gold also has dual attributes as an investment tool, luxury goods, and jewelry making material.

The World Gold Council predicts that the trend of central banks continuing to purchase gold may continue for many years or even decades, and is expected to further support the performance of gold.

Source: Shangguan News

Basic Information
  • Year Established
  • Business Type
  • Country / Region
  • Main Industry
  • Main Products
  • Enterprise Legal Person
  • Total Employees
  • Annual Output Value
  • Export Market
  • Cooperated Customers

Send your inquiry

Choose a different language
bahasa Indonesia
Tiếng Việt
Current language:English