This seemingly never-ending gold rally just keeps on giving. What initially started as a reaction to COVID back in 2020 has now transformed into one of the most prolonged and meaningful bull runs in gold’s modern history. The questions remain: why does gold continue to achieve new all-time highs, and how long will this momentum last?

The first part of that question is easier to answer. Currently, all three segments of the gold market are actively participating, resulting in sustained and growing demand for the yellow metal.

Central banks have been the primary driver of global gold demand since the onset of COVID. Although the majority of this buying has been concentrated within a dozen or so central banks, predominantly those in the East, this demand has created a robust floor for gold prices throughout the rally.

Perhaps even more notably, we’ve seen the recent arrival of ETF investors to the precious metals market. Demand from physically-backed gold exchange-traded funds (ETFs) has been almost exclusively net positive since April 2024 and has surged in recent weeks. According to the World Gold Council, gold ETFs added 23.9 tons of physical gold in the week ending October 18 and 14.7 tons in the week ending October 25.

Combined with steady retail investment buying in North America, Europe, and Asia, the demand from central banks and ETFs is fueling this continued rally.

So, how long can this momentum continue? Conservative estimates put gold at $2,800 to $2,900 USD per ounce by the end of 2024, while more aggressive analysts anticipate a price of over $3,000. However, one potential concern is that with all three major market participants now fully engaged, this could indicate that we’re nearing a market peak. For those who purchased gold at $1,200, $1,500, or $2,000 an ounce, now may be a good time to consider some responsible profit-taking.

Source: World Gold Council

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