​Gold started surging substantially in March and April 2024 and reached a new record high of $2,401 per ounce. At the time of writing, gold is trading slightly lower at $2,335, as shown in Figure 1. Gold reaching high prices seems reasonable in the current state of the economy. However, the exact timing does not support this breakout. Gold flourishes in high inflation, high uncertainty, and recession ecosystems. High uncertainty is certainly true with continued geopolitical tensions, e.g. Russia-Ukraine, Israel-Palestine-Iran, etc. While there is no recession currently, indicators imply a recession for years now, which is further supported by the growing tensions around the world. High inflation was present, and inflation is still moderately high. Nonetheless, interest rates, even on a real basis, are high, which historically has shown to behave anticyclical to gold. The current view on a “higher for longer” ecosystem, which implicates high interest rates for a longer time, also does not favour gold. While uncertainty and a potential recession are valid reasons for increases in gold prices, it further benefits from the fact that the asset will likely perform well whether there is a recession or not, which not many other assets can claim. Additionally, central banks have been accumulating a lot of gold, especially China and Eastern countries. Perhaps, Eastern central banks have acquired the amount of gold Western countries are ready to sell, which leads to a shortage of supply and increasing prices.

​Although oil prices were relatively steady at moderate to high levels over the past year, prices started increasing. Most recently, a potential intervention by Iran in the conflict in Israel led oil to surge further in price. At its peak in 2024, WTI crude oil traded at nearly $88 per barrel, which fell slightly to the current level of $86 per barrel, as shown in Figure 1. This decline is attributed to the current view that Iran has refrained and is expected to continue to refrain from getting involved in the conflict. Nonetheless, geopolitical tensions in the Middle East pose a significant threat to oil supply and could result in price shocks should the current situation escalate. Excluding major escalation, it is likely that oil will remain relatively stable throughout 2024 with limited upside and downside potential. The current economic situation and at least the short-term outlook appear to be beneficial for oil demand. Improved manufacturing data from the US, China, and India boost the requirement for oil. Interest rate cuts on the horizon are likely to boost economies, which also results in higher oil demand. On the supply side, the OPEC+ held the supply relatively tight to maintain moderate to high prices for oil. In case oil should move significantly higher, production would likely increase from the OPEC+, as it would push alternatives which hurts oil's long-term outlook. Nonetheless, in the case of escalations, especially in the Middle East, supply could be constrained, which could result in strongly soaring oil prices that cannot be resolved quickly.