Gold is Back — 4 Reasons Why Gold May Continue to Shine

As the world’s attention fixates on the next big AI tech stock, a modest commodity has quietly outperformed all traditional assets in 2024 — yet few have noticed.

Gold’s Stellar Performance

Since the beginning of 2024, gold has emerged as the top-performing traditional asset, boasting a remarkable return of over +16.24%.

This impressive performance has outshined all major asset classes such as US stocks, as measured by the S&P 500 index (+11.05%), commodities (+8.58%), emerging market stocks (+7.33%), and cash (+1.95%). In stark contrast, US long term bonds experienced a decline of -6.04%, further highlighting gold’s standout success in the current financial landscape.

Why Is Gold Outperforming Everything Else?

Several factors contribute to gold’s outstanding performance in 2024:

1. Persistent Inflation: With global inflation expected to remain elevated as governments shift back to easing monetary policies (‘printing money’), gold’s appeal as an inflation hedge has increased. An inflation hedge is an asset that retains or grows its value faster than inflation.
2. Demand for ‘Borderless’ Investment: Rising geopolitical tensions and the weaponisation of national currencies like the U.S. dollar have increased investors’ appeal for gold. Unlike the U.S. dollar, gold is viewed as a safer, non-country-specific asset that can not be weaponised through international sanctions or seizures.
3. Distrust in the U.S. Dollar: The escalating US national debt is causing concern, with interest payments likely to become the largest single expenditure by the end of 2024. Non-US investors are swapping their dollar reserves for gold at record rates, bringing the dollar’s share of global foreign reserves to its lowest since 1995.
4. Geopolitical Risks: From conflicts in the Middle East to trade tensions between major world powers, 2024 has also been marked by heightened geopolitical tensions. Ongoing conflicts and global uncertainties drive investors towards gold, which is traditionally seen as a safe haven during times of geopolitical instability.

Why Is Gold Outperforming?

Several factors contribute to gold’s outstanding performance in 2024, these include:

1. Persistent Inflation: With global inflation expected to remain elevated as governments shift back to easing monetary policies, and lowering interest rates, gold’s appeal as an inflation hedge has increased. An inflation hedge is an asset that retains or grows its value faster than inflation.
2. Demand for ‘Borderless’ Investment: Rising geopolitical tensions and the weaponisation of national currencies like the U.S. dollar have increased investors’ appeal for gold. Unlike the U.S. dollar, gold is viewed as a safer, non-country-specific asset that can not be weaponised through international sanctions or seizures.
3. Distrust in the U.S. Dollar: The ballooning US national debt is causing concern, at $27 trillion. That number puts the USA’s debt at about 100% of its annual GDP, far above the roughly 30% debt-to-GDP ratio the USA had in the 1970s and the current ratio of most other OECD countries. What this means is that the US government interest payments in the future are likely to become the largest single cost of the country by the end of 2024. Higher than both military and educational costs. Non-US investors are swapping their dollar reserves for gold at record rates, bringing the dollar’s share of global foreign reserves to its lowest since 1995.
4. Geopolitical Risks: From conflicts in the Middle East to trade tensions between major world powers, 2024 has also been marked by heightened geopolitical tensions. Ongoing conflicts and global uncertainties drive investors towards gold, which is traditionally seen as a safe haven during times of geopolitical instability.

Central Banks Are Buying Gold at a Record Pace

Central banks are some of the biggest players in the gold investing market. Their main function is to maintain the health and stability of their country’s economy and financial system by holding and utilising a mix of secure reserve assets and reliable stores of value.

In 2022 and 2023, central banks dramatically changed their mix of investments by ramping up their gold acquisitions by over +130%, when compared to 2021. Despite the high purchasing levels of the past two years, central bank gold buying has not only continued into 2024, but has also set a new record. This year’s first-quarter purchases are the highest since the World Gold Council began tracking this data in 2000.

Should you be Buying Gold as Well?

Remember, there is one fundamental rule in investing – never listen to what they say, always look at what they do.

When looking at central banks from around the world one thing is clear, they are betting a large portion of their countries’ futures on gold.

Given the ongoing global economic uncertainties, this strategic shift suggests that the banks of countries believe that gold will be one of the superior assets to hold going into 2024 and beyond.

Introducing Physical Gold on the Blockchain

Investing in Gold has entered a new era of accessibility and security with the emergence of blockchain technology. PAX Gold (PAXG), offered exclusively by Altify, offers a low cost and easy solution for owning a fraction of an investment-grade physical gold bar, recorded on a blockchain.

Each PAXG token is backed by one fine troy ounce of gold stored in London Bullion Market Association (LBMA) vaults, meaning that if you own a PAXG token, you have the legal ownership right to the underlying physical gold, held in custody by U.S. regulated and insured trust company called Paxos.

PAXG is for anyone looking to invest directly in gold without the safe custody and insurance burdens of physical ownership. This is particularly pertinent in South Africa, where keeping physical gold in a home safe poses a significant risk.

Where Can You Buy PAX Gold (PAXG)?

Cape Town-based investment platform Altify backed by JSE-listed Sabvest, offers PAX Gold (PAXG) through its app and web platform with no buy fees on all PAX Gold purchases for 10 days, starting on the 22nd of May and ending on the 1st of June 2024 (See terms here).

Altify is easy to use, has no sign up fees, and has minimum investment amounts as low as R150 with non lock-up periods, meaning you can sell your PAX Gold at any time 24/7/365.

Altify also offers 20+ cryptocurrencies, and 13 ETF-style Crypto Bundles which provide diversified exposure to the broader crypto market or niche crypto sectors through a single investment. Their Crypto Bundles automatically update every month ensuring your crypto holdings stay up to date with the fast moving crypto market.

Article Disclaimer

This article is intended for informational purposes only. The views expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. Altify provides a reception and transmission brokerage service for crypto asset orders without giving any investment advice or personalised recommendations.

While we believe in crypto accessibility for all, we also know that it might not be appropriate for everyone. Before investing, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. You are encouraged to conduct thorough research into cryptocurrencies before making any investment.

As an investor, you are responsible for making decisions regarding your investments. Please consider your personal circumstances when buying or selling crypto as the price can be very volatile.

Remember, investing in cryptocurrencies is considered a high-risk investment as the value of cryptocurrencies are subject to extreme price fluctuations and may both appreciate and depreciate over time. Investing in Crypto assets may result in the loss of capital.

Remember past performance does not guarantee future results and we can’t guarantee returns since asset prices move based on supply and demand, so never trade with funds you can’t afford to lose. You should seek professional advice if you’re uncertain about the suitability or appropriateness of any investment for your specific circumstances or needs.

Further information can be found in the General Risk Disclosures and Crypto Risk Disclosures on our website. Investments should only be made by investors who understand these risks.

For more information, please visit www.altify.app.

About Altify

Altify is headquartered in London, with satellite offices in Cape Town and Vienna. The fintech business is backed by notable investors Sabvest, High-Tech Gründerfonds, CVVC, Emurgo & Calm Storm Ventures, to name a few. Altify’s mobile app and desktop platform provide a user-friendly and low cost way for over 80,000 users to grow their wealth outside the stock market — offering access to a wide range of cryptocurrencies, ,13 ETF-style Crypto Bundles, and gold.