On July 13, global markets were thrown into uncertainty when former US President Donald Trump was shot at a campaign rally in Pennsylvania. This incident further fueled demand for gold as a safe haven. Bank of America predicts that gold prices could rebound to $3000 per ounce in the next 12-18 months. Citibank's report also indicates a positive trend in gold consumption for 2024, with spot prices expected to reach $2400-$2600 per ounce in the second half of the year and a mid-2025 target of $2800-$3000 per ounce.

Impact of US Bond Market Turbulence on Gold

As of now, the total US federal government debt has surpassed $32 trillion, with spending exceeding the 2024 fiscal year by $855 billion. This has led to market instability as the US Treasury releases large amounts of bonds, but market demand has not increased proportionally. The resulting bond market volatility is driving more investors toward gold, enhancing its value as a safe haven. Marko Papic, Chief Strategist at BCA Research Inc., believes that as Trump's chances of re-election rise, the likelihood of bond market turmoil also increases, which will be beneficial for gold prices.

Supply Pressure from Declining Gold Production

The World Gold Council notes that although gold production increased by 4% year-on-year in the first quarter of 2024, overall production has plateaued since 2016. The difficulty in finding new gold deposits has grown, limiting production growth. According to the International Trade Association, gold production in 2023 only saw a slight increase of 0.5% from the previous year, compared to 1.35% in 2022 and 2.7% in 2021. This trend suggests tighter future gold supply, which will further push up prices.

Central Bank Gold Accumulation Trend

In 2023, central banks globally added 1037 tons of gold, marking the second-highest annual purchase on record. According to a World Gold Council survey, 29% of central banks plan to increase their gold reserves in the next 12 months. This trend is particularly evident in emerging markets; for instance, the Reserve Bank of India added over 9 tons of gold in June 2023, bringing its total reserves to 841 tons. The complex geopolitical and financial environment is prompting central banks to emphasize gold reserves, supporting higher gold prices.

Investment Opportunities in the Gold Market

In summary, global market uncertainties, US debt issues, tight gold supply, and central bank gold accumulation trends all indicate significant upward potential for gold prices. Investors should closely monitor these factors to seize opportunities in the gold market for asset preservation and growth. In the context of a complex and ever-changing global economic and political environment, gold's role as a safe haven asset will become increasingly prominent.

How to place a trade on uSMART mobile application：

After logging into the uSMART SG app, tap on "Quates" at the bottom of the page.Scroll to the right until you see the "Commodities" section.Search for XAU and XAG to add them to your watchlist.Tap on the desired asset (gold or silver) to view trading details.Tap on the "Trade" button at the bottom right corner.Select the "Buy/Sell" function.Enter the price, quantity, and trading conditions.Submit your order.For image-guided instructions, please refer to the following steps:

This diagram is provided for illustrative purposes exclusively

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