After a turbulent 2023, gold investors forecast record high prices the following year due to fundamental support from the U.S. Federal Reserve's dovish turn in interest rates, ongoing geopolitical risk, and central bank buying.
At about $2,060 an ounce, spot gold is expected to grow by 13% annually in 2023, its highest year since 2020.
"Following on from a surprisingly robust performance in 2023 we see further price gains in 2024, driven by a trifecta of momentum chasing hedge funds, central banks continuing to buy physical gold at a firm pace, and not least renewed demand from ETF investors," Saxo Bank's Ole Hansen said.
Gold surpassed the previous record set in 2020 and reached a record high of $2,135.40 on December 4 on predictions that U.S. monetary policy will ease in early 2024 following a dovish stance by Federal Reserve Chair Jerome Powell.
With the onset of the U.S. regional financial crisis in May of this year, the precious metal came dangerously close to breaking new ground. It had dropped to about $1,800 an ounce by October when a subsequent spike was sparked by desire for safe haven due to the Israel-Hamas conflict.
The well-known SPDR Gold Shares exchange-traded fund, which saw net inflows of more than $1 billion in November, attracted back investors.
In October, a Reuters survey predicted that prices in 2024 will average $1,986.50. They have surpassed all prior yearly averages by averaging over $1,950 thus far this year.
Midway through 2024, J.P. Morgan predicts "a breakout rally" in gold, with a $2,300 peak as the result of anticipated rate reduction. If the cuts come through, UBS predicts a record of $2,150 by the end of 2024.
According to the World Gold Council's 2024 outlook, a decline of around 40 to 50 basis points in longer-term yields after rate cuts of 75–100 points may result in a 4% increase in gold prices.
According to analysts, the Middle East conflict, unpredictability surrounding major economy elections, and China-led central bank purchases would all increase demand for safe-haven bullion in 2019.
However, according to Han Tan, chief market analyst at Exinity, "gold could be forced to unwind some of this year's gains if an inflation resurgence forces the Fed to abandon plans for a policy pivot in 2024."
Retail sales could be negatively impacted by inflation if it declines more quickly than the Fed lowers interest rates.
Heraeus Metals anticipates increased demand for gold jewellery in China's main consumer market this year, with additional help from stimulus measures potentially coming in 2024.
In comparison, silver is predicted to drop 1% in 2023 and trade at slightly less than $24 per ounce. Benefiting from better industrial demand, it will trend towards $26 an ounce in 2019, predicts TD Securities.
According to Heraeus, platinum, which is expected to decline by 6% in 2023, will hover around $800 to $1,100 per ounce in 2024.
Palladium prices that are dependent on autocatalysts dropped by almost 33% this year, marking the worst performance for the market since 2008. This illustrates the impact of the energy shift.
Palladium is facing surpluses as electric vehicles gain popularity. The metal dipped below $1,000 an ounce in November for the first time in five years before rising.
Barring any significant supply disruptions, Bank of America projects that the average price of palladium will be $750 per ounce in 2024.
(Source:www.reuters.com)
At about $2,060 an ounce, spot gold is expected to grow by 13% annually in 2023, its highest year since 2020.
"Following on from a surprisingly robust performance in 2023 we see further price gains in 2024, driven by a trifecta of momentum chasing hedge funds, central banks continuing to buy physical gold at a firm pace, and not least renewed demand from ETF investors," Saxo Bank's Ole Hansen said.
Gold surpassed the previous record set in 2020 and reached a record high of $2,135.40 on December 4 on predictions that U.S. monetary policy will ease in early 2024 following a dovish stance by Federal Reserve Chair Jerome Powell.
With the onset of the U.S. regional financial crisis in May of this year, the precious metal came dangerously close to breaking new ground. It had dropped to about $1,800 an ounce by October when a subsequent spike was sparked by desire for safe haven due to the Israel-Hamas conflict.
The well-known SPDR Gold Shares exchange-traded fund, which saw net inflows of more than $1 billion in November, attracted back investors.
In October, a Reuters survey predicted that prices in 2024 will average $1,986.50. They have surpassed all prior yearly averages by averaging over $1,950 thus far this year.
Midway through 2024, J.P. Morgan predicts "a breakout rally" in gold, with a $2,300 peak as the result of anticipated rate reduction. If the cuts come through, UBS predicts a record of $2,150 by the end of 2024.
According to the World Gold Council's 2024 outlook, a decline of around 40 to 50 basis points in longer-term yields after rate cuts of 75–100 points may result in a 4% increase in gold prices.
According to analysts, the Middle East conflict, unpredictability surrounding major economy elections, and China-led central bank purchases would all increase demand for safe-haven bullion in 2019.
However, according to Han Tan, chief market analyst at Exinity, "gold could be forced to unwind some of this year's gains if an inflation resurgence forces the Fed to abandon plans for a policy pivot in 2024."
Retail sales could be negatively impacted by inflation if it declines more quickly than the Fed lowers interest rates.
Heraeus Metals anticipates increased demand for gold jewellery in China's main consumer market this year, with additional help from stimulus measures potentially coming in 2024.
In comparison, silver is predicted to drop 1% in 2023 and trade at slightly less than $24 per ounce. Benefiting from better industrial demand, it will trend towards $26 an ounce in 2019, predicts TD Securities.
According to Heraeus, platinum, which is expected to decline by 6% in 2023, will hover around $800 to $1,100 per ounce in 2024.
Palladium prices that are dependent on autocatalysts dropped by almost 33% this year, marking the worst performance for the market since 2008. This illustrates the impact of the energy shift.
Palladium is facing surpluses as electric vehicles gain popularity. The metal dipped below $1,000 an ounce in November for the first time in five years before rising.
Barring any significant supply disruptions, Bank of America projects that the average price of palladium will be $750 per ounce in 2024.
(Source:www.reuters.com)