How to Benefit from the Bullish Run in Gold in 2024 : Alex Volkov, Market Analyst at VT Markets

New Delhi: As we near the end of 2024, gold continues to exhibit strong bullish momentum, driven by several key factors. Persistent economic uncertainty has played a significant role, with global growth slowing, especially in major economies like the US and Europe. Rising inflation, increasing interest rates, and looming recession fears have steered investors towards gold, a classic safe haven. Additionally, ongoing geopolitical tensions in Eastern Europe and the Middle East have heightened investor apprehension, further boosting gold’s appeal as a hedge against political risk. The volatility of the US dollar throughout 2024, marked by periods of weakness due to mixed economic data and the Federal Reserve's cautious stance on interest rates, has also contributed to the upward trend in gold prices.

Alex Volkov, Market Analyst at VT Markets, said, Given the current upward trend, traders have several strategies to capitalise on the momentum. One straightforward approach is to trade physical gold—such as bullion, coins, or bars—which offers a tangible asset with historical value, particularly during periods of economic and political instability. As the year concludes, holding real gold remains a viable option. For those seeking more liquidity and convenience, gold ETFs (exchange-traded funds) are popular. These funds track gold prices, allowing investors to benefit from gold price movements without owning physical gold. Another approach involves investing in gold mining stocks, often providing leveraged exposure to gold prices. As gold prices rise, these mining companies' profits and stock values tend to increase even more significantly. However, it is essential to be aware that mining stocks come with additional risks, including operational issues and management decisions.

For more advanced traders, gold futures and options offer opportunities to speculate on gold’s future price. These financial instruments can yield substantial profits, especially in volatile markets, but they also entail higher risk due to leverage and market complexity.

Proper risk management is vital for every trading approach. Instead of focusing on gold, traders should diversify their portfolios among various assets to avoid risk. It is also critical to stay informed about global economic and political developments, as these significantly impact gold prices. Timing is also crucial; while momentum may be high, gold prices can fluctuate unexpectedly, necessitating careful planning of entry and exit points.

Your strategy may differ depending on your trading objectives. Trading gold futures or acquiring gold mining firms may generate faster gains but also carry more dangers. Traders seeking a hedge against inflation or future economic downturns, on the other hand, may prefer to store physical gold or trade gold ETFs, which provide better stability and can help protect wealth over time.

As 2024 draws to a close, gold remains a compelling trading option. Whether you prefer physical gold, ETFs, mining stocks, or more sophisticated instruments such as futures and options, there are several ways to profit from the bullish trend. By remaining knowledgeable and carefully controlling risks, you may be able to capitalise on gold's trend and perhaps earn significant returns by the end of the year.