Gold heads for biggest gain since 2010 in mixed year for metals

(Bloomberg) — Gold is headed for its biggest gain in 14 years, with a 27% advance fueled by U.S. monetary easing, sustained geopolitical risks and a wave of buying by central banks.

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While bullion has fallen lower since Donald Trump’s landslide victory in November’s US presidential election, its gains over 2024 still outpace most other commodities. Base metals had a mixed year, while iron ore fell and lithium woes deepened.

The varied performances over 2024 highlight the absence of a single primary driver that has driven the fortunes of the complex, and also shed light on how metals, both base and precious, could fare next year. For 2025, investors are focused on the uncertainty around the monetary policy of the United States, the potential frictions from the presidency of Trump and the efforts of China to revive the growth.

Gold’s strong gains this year – which have seen the precious metal set a succession of record highs – may signal a possible change in market dynamics, given that they have come despite a stronger US dollar and growth in real Treasury yields, both typically headwinds.

The precious metal has been “as remarkable as it is relentless, making it my biggest market surprise of 2024,” David Scutt, analyst at StoneX Group Inc., said in a note. “The gold game seems to have changed.”

Other metals have struggled largely due to China’s prolonged economic slowdown.

• The six-metal LMEX index on the London Metal Exchange is on track for a modest annual gain, with softer Chinese demand offset by flashes of supply stress – particularly in copper and zinc – which may persist in 2025.

• Iron ore fell as weak construction activity plunged China’s steel industry into crisis mode, with little relief in sight. Futures in Singapore have fallen about 28% this year, the biggest annual drop since 2015.

• Lithium – used to make batteries – is on track for a second sharp annual decline as a serious and ongoing global oversupply has been exacerbated by turmoil for the electric vehicle industry.

In Tuesday’s trading, spot gold rose 0.7% to $2,625.95 an ounce by 1:29 pm in New York, compared with an October peak above $2,790; Iron ore futures settled 0.4% higher at $100.97 a tonne; and LME copper fell 1.6% to close at $8,768 a tonne in London.

–With assistance from Winnie Zhu and Mark Burton.

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