Gold prices, driven by heightened geopolitical tensions and safe-haven demand, surged to all-time highs this April 2024, according to the latest World Bank report on precious metals.

This rise marks a continuation of a trend that saw a 4 percent increase in the precious metals index in the first quarter of 2024.

The World Bank’s projections indicate an anticipated 8 percent year-on-year increase in the precious metals index for 2024, with prices for gold expected to average $2,100 per troy ounce by year’s end.

However, these estimates could be conservative should geopolitical uncertainties escalate further.

The report highlights that gold’s unique status as a safe-haven asset has been a primary driver behind the surge in prices.

According to the report, “Safe-haven demand for gold is set to strengthen further in 2024 amid heightened geopolitical and policy uncertainty, partly related to the high number of upcoming elections worldwide.”

In the first quarter of 2024 alone, gold prices climbed by 5 percent quarter-on-quarter before reaching unprecedented levels in April.

This remarkable increase was fueled by robust demand from emerging market and developing economy (EMDE) central banks amidst ongoing geopolitical tensions.

Despite some outflows of gold holdings in exchange-traded funds during the same period, attributed to changes in U.S. monetary policy expectations and rising government bond yields, gold prices have remained buoyant.

“Buoyant prices have sustained despite outflows of gold holdings in exchange-traded funds in 2024Q1, which is likely related to the diminishing extent of anticipated U.S. monetary easing this year and rebounding government bond yields amid robust economic activity in the United States.
“Gold prices are expected to increase in 2024, decoupling from the prior inverse relationship with real yields, even despite recent outflows from gold exchange-traded fund.”
World Bank

Looking ahead, the report suggests that gold’s upward trajectory may moderate in 2025 as global inflation pressures ease. Nonetheless, the potential for unexpected escalations in geopolitical conflicts could keep prices elevated.

Silver and Platinum, Industrial Demand and Supply Dynamics

Silver and platinum, while showing more tempered movements compared to gold, also demonstrated positive trends. Silver prices edged up by 0.5 percent in the first quarter of 2024 and are expected to increase by 7 percent year-on-year by the end of this year.

The growth in silver demand is largely driven by industrial applications, particularly in vehicle electrification and renewable energy infrastructure.

“Investor interest in silver is set to be bolstered by advanced-economy interest rate cuts later this year. Silver supply is projected to grow in 2024, with increased mine production in Chile, Mexico, and Russia offsetting declines in silver recycling and by-product output.”
World Bank

Platinum prices, after a slight decline in the first quarter, are forecasted to rise by 4 percent in 2024. The demand for platinum, primarily from the jewelry and auto sectors, is expected to grow.

However, the report stated that “Industrial demand is anticipated to fall mirroring the subdued activity in the fiberglass and petrochemical industries.”

The report underscores that supply dynamics, including reduced production from major producers like Russia and South Africa, will likely support platinum prices in the coming years.

As such, while the global economy continues to navigate through various uncertainties, the precious metals market remains a key barometer of investor sentiment.

Gold’s ascent to record highs reflects the prevailing mood of caution and the quest for safe-haven assets in times of geopolitical turmoil.

Silver and platinum, though following different trajectories, also reflect a broader trend of industrial resilience amidst changing economic landscapes.