--- title: "The Global Economy Reels Between Yellow and Black Gold | Ghazi Mahmoud" url: https://ghazimahmoud.com/en/articles/2024-12-18-5bb67b/ lang: en description: "The geopolitical developments that marked 2024 had varying repercussions on the global economy, and while fears of rising oil and gas prices ran high, the surprise came from the price of the yellow metal." --- [All articles](https://ghazimahmoud.com/en/articles/) # The Global Economy Reels Between Yellow and Black Gold [Brig. Gen. (Ret.) Dr. Ghazi Mahmoud](https://ghazimahmoud.com/en/about/) 18 Dec 2024 · 5 min read [Energy, oil and gas](https://ghazimahmoud.com/en/articles/energy/)[Banking and money](https://ghazimahmoud.com/en/articles/money/)[The world economy](https://ghazimahmoud.com/en/articles/world/) The geopolitical developments that marked 2024 had varying repercussions on the global economy, and while fears of rising oil and gas prices ran high, the surprise came from the price of the yellow metal. Despite the continuation of the Russia-Ukraine war and the Israeli war on Lebanon, Gaza, Syria, and Yemen following Houthi threats to shipping in the Red Sea and their support for the resistance in Gaza, and despite the exchange of strikes between Israel and Iran, fluctuations in oil and gas prices remained within narrow margins. While crises or political tensions often trigger spikes in oil and gas prices, events on the international stage have shown that their prices have recently failed to respond to geopolitical developments. After oil prices reached the threshold of $140 a barrel with the outbreak of the Russia-Ukraine war in early 2022, prices stabilised relatively at levels not exceeding $80 a barrel, despite higher shipping and insurance costs caused by the diversion of vessels away from the Red Sea, through which nearly 12 per cent of global trade passes, in addition to repeated disruptions to Libyan oil exports. It is worth noting that the series of voluntary production cuts approved by "OPEC+" since 2022 played the primary role in stabilising oil prices amid slowing global economic growth. Notably, the price of Brent crude had risen by more than $2 at the start of the war on Gaza on October 7, 2023, due to fears of a potential disruption to the region's exports, only to later lose more than half of what it had gained, despite the continued escalation of geopolitical tensions and the widening scope of military confrontations. Also contributing to the stability of oil prices were rising US crude inventories and abundant supply from non-OPEC producing countries, in addition to higher inventories held by producing nations and expectations of a surplus from OPEC members themselves. Oil prices have also maintained their stability despite the tightening of US sanctions in April on Iranian oil, which China buys through third countries. Meanwhile, oil prices are expected to fall in 2025, with all that implies for a continued slowdown in the global economy. Conversely, as 2025 approaches, the price of an ounce of gold has surpassed the $2,700 threshold, bringing its rise in 2024 to 38%, according to Britain's The Economist magazine. As US President-elect Donald Trump's return to the White House next January draws near, and with potential and anticipated shifts on the international stage, the role of the yellow metal stands out as a linchpin of the global economy and a focus of investor interest amid growing economic and political uncertainty. This has led to a notable increase in consumer and investor interest in the yellow metal as a safe haven, particularly since it provides effective protection against inflation and is considered a strategic means of diversifying investment portfolios and a tool for reducing financial risk. This interest comes after central banks reassessed their reserve strategies and bolstered their gold reserves, notably Singapore and Poland, as a result of the Russia-Ukraine war and the instability of the global financial system. At the same time, central banks are expected to continue buying gold at the same pace for the foreseeable future. It is worth noting that gold maintained an average price of $400 per ounce (troy ounce) over a long period stretching from January 1975 to February 2005, although this period was not without upward and downward fluctuations in the price of gold, specifically between 1979 and 1980, when the price of gold reached around $820 an ounce, only to return each time to the average price mentioned above. That surge coincided with rising crude oil prices and the ensuing inflation during the same period. The period from February 2005 to August 2011, and especially the period between 2005 and 2008 when commodity prices boomed alongside growing demand from emerging economies such as China and India and heightened investor interest in commodities, witnessed a marked rise in the price per ounce, which jumped from $400 to $1,880. The price then fell again during the second half of 2008 as a result of the global financial crisis, which began with what became known as the subprime mortgage crisis in the United States of America that year. The price of gold fell once again after peaking in August 2011, dropping in December 2015 from $1,855 an ounce to $1,050, while in 2016 the price rose to settle at an average of around $1,200 until the end of September 2018. In 2020, the price of gold resumed its climb, jumping to nearly $1,620 an ounce, though without surpassing the peak it had reached in August 2011. Today, however, gold appears to have exceeded all expectations since February 2022, after the price stood at $1,720 at the beginning of that same year. Meanwhile, amid mounting fears over inflation and geopolitical tensions, central banks and investors are expected to continue buying gold, and its prices are consequently expected to keep rising, reinforcing its status as a safe haven and confirming its role as one of the most reliable investment assets. As for fluctuations in oil and gas prices, they are expected to remain within narrow margins so long as the slowdown in the global economy continues, accelerated by slowing economies in producing countries whose revenues are declining, provided that producing nations continue cutting their output to prevent flooding the market with excess production. This leaves the global economy reeling between the black and yellow minerals. Translated from Arabic with AI. [Read it in Arabic](https://ghazimahmoud.com/articles/2024-12-18-5bb67b/) ## Published in - [Channel 23](https://ch23.com/Article/227373/الاقتصاد-العالمي-يترنح-بين-الذهبين-الأصفر-والأسود) - [MTV Lebanon](https://www.mtv.com.lb/news/1532117) - [Lebanon Files](https://archive.lebanonfiles.com/2024/articles/باقلامهم/الاقتصاد-العالمي-يترنح-بين-الذهبين-ال/) - [Radar News](https://www.radar-news.net/الاقتصاد-العالمي-يترنح-بين-الذهبين-ال/) ## More on energy, oil and gas [All articles on this subject](https://ghazimahmoud.com/en/articles/energy/) [9 Dec 2024 · The Limits of Oil and Gas Wars in the Middle East · Lebanon Files ](https://ghazimahmoud.com/en/articles/2024-12-09-85e728/) [4 Dec 2024 · The Region's Wars and Their Economic Limits · Channel 23, OZ Arab Media ](https://ghazimahmoud.com/en/articles/2024-12-04-77eabe/) [23 Oct 2024 · Oil Prices Between Geopolitical Conflicts and Economic Factors · Channel 23, LinkedIn ](https://ghazimahmoud.com/en/articles/2024-10-23-b23f1f/)