Is buying gold for storage in 2025 effective? An in-depth analysis of opportunities and risks

Amid global market volatility, gold continues to attract investors’ attention, especially after the gold price reached a record high of $2,790 per ounce in the last quarter of 2023. This article will help you clearly understand whether investing in gold in 2024 is attractive.

Is it worth buying gold? Perspectives from leading financial institutions

To make a good decision, consider the opinions of global experts first.

Goldman Sachs forecasts that gold has the potential to reach $2,700 per ounce by the end of this year, mainly due to strong demand from central banks worldwide and ongoing geopolitical risks.

J.P. Morgan has a relatively moderate view. Although high interest rates may exert short-term pressure, expectations that the Fed will cut rates early in 2024, combined with central bank demand, will support higher prices.

FX Empire analyst AG Thorson has the most optimistic outlook. If global tensions increase or the economy slows down, gold could surge to $3,000 per ounce next year.

What drives gold prices higher?

Gold prices do not rise for a single reason but result from multiple factors combined.

Central bank purchases are the main driver. In the first quarter of 2024, net gold purchases reached 290 tons, 36% above the quarterly average. China, India, and Turkey are the major buyers, aiming to reduce reliance on the US dollar. China increased holdings from 1,900 tons to over 2,500 tons, while India plans to raise its reserves from 7% to 10% by 2025.

Global tensions from the ongoing Russia-Ukraine war, Middle East conflicts, and political changes in the US have led investors to seek safe-haven assets like gold.

Interest rate policies Expectations that the US Federal Reserve will cut rates early in 2024 make gold, which does not yield interest, more attractive. Lower rates also weaken the dollar, positively impacting gold prices.

Inflation and economic concerns The US budget deficit and persistent inflation make gold a preferred hedge for investors.

Based on price charts, will gold continue to rise?

Technical analysis shows key support at $2,447 per ounce, the 200-day moving average, and resistance at $2,800 per ounce. The fact that prices remain above support indicates a continuing bullish trend.

Although recent corrections after testing the $2,800 level occurred, the RSI indicates the market is not overbought, leaving room for prices to rise further. The MACD is approaching the Zero Line, and if it can stay above it, the uptrend will be confirmed. Increased trading volume during upward moves is a positive sign, showing investor confidence in further gains.

When is the best time to buy gold for optimal results?

Holding period is crucial. For long-term investments (3-5 years or more), gold helps diversify risk as it moves inversely to stocks. For short-term (6 months - 1 year), be cautious of volatility and have clear entry and exit plans.

Investment allocation Experts recommend allocating about 5-10% of your total portfolio. For example, if you have 1 million baht, invest 50,000-100,000 baht in gold. Do not exceed 15-20% to maintain balance.

Entry points Based on technical analysis, buying when prices drop near $2,447 (key support) could be a good opportunity. If prices fall below $2,500, it’s also a chance. Using Dollar-Cost Averaging, divide your investment into 4-6 parts and buy gradually as prices decline.

Risk assessment Although gold is a safe asset, it carries risks. Prices could drop 10-15% in normal conditions or up to 20-25% during crises. For example, with a 100,000 baht investment, be prepared for fluctuations that could reduce the value to 75,000-90,000 baht.

Should you buy gold now? Final decision

This year, buying gold is advisable, especially for those with a long-term investment policy and risk diversification.

However, keep in mind:

• Do not invest money needed for short-term expenses
• Assess your risk tolerance beforehand
• Use a gradual buying strategy instead of lump-sum investment
• Gold should be part of a diversified investment strategy, not all-in

With careful consideration and reasonable risk spreading, investing in gold in 2024 is a prudent option.