Gold Just Recorded Its Biggest Monthly Gain in More Than a Year, Spring Rally Expected to Continue

Published on: Mar 28, 2024
Author: Caroline Kong

Although trading this week was shortened due to the Easter Day on Friday (29 March), this did not prevent the price of gold from continuing its wild ride on the way to new record highs. Gold prices closed near $2,241 on the last trading day of this week and the month as well, giving the precious metal prices a cumulative gain of 2.7 per cent for the week compared to last Friday’s close, and a total of nearly 9 per cent recorded for the month of March.

It is worth pointing out that the US dollar index is currently running at a six-week high above 104 points, which makes this rise in gold prices even more impressive.

After the close of trading on Friday the week before, many analysts and investors thought that the probability was that gold prices would pull back this week, as they had already hit a new all-time high of $2,200. However, in anticipation of a series of driving factors such as three Fed rate cuts in 2024, vague economic growth outlook, and geopolitics, gold prices continued to test the $2,250 resistance level upwards, igniting the bullish sentiment.

Darin Newsom, senior market analyst at Barchart, said the gold rally is a signal that investors are worried about the Fed’s inability to rein in inflation after it began cutting interest rates. And gold is the best hedge against geopolitical risk, with geopolitical concerns only intensifying as the time for the U.S. election approaches.

Adam Button, chief currency strategist at, is more bullish on the aftermath for gold, arguing that this is just the start of an uptrend and that the precious metals sector as a whole remains overlooked in the wider market. In particular, he adds that related gold mining stocks, although off their lows, are still heavily undervalued compared to the gold price and investors could look at opportunities in related areas.

However, he argues that investors would do well to be patient for a pullback and that the best course of action may be to sell when everyone is talking about gold and gold stocks. He notes that there appears to be some initial support for gold at $2,150, which could attract some buyers.

Ole Hansen, head of commodities strategy at Saxo Bank, said he expects the gold market to have the potential for further gains, and that it’s not just momentum that’s driving the price up right now. Concerns about the risk of weakness in gold prices forcing long positions to be liquidated have receded sharply over the past few weeks as the price has broken through $2,200.

Next week, investors will focus on US non-farm payrolls report for March, scheduled for release next Friday. TD Securities commodities analysts said that macro traders certainly still have room to add to their gold holdings, but only if rate cuts are not expected to be affected by the jobs report and inflation data. Overall, gold prices are still facing some correction pressure next week.

Federal Reserve Gold Interest Rate Precious Metals