As we step into the much promising year of 2024, the global economic landscape continues to evolve, presenting investors and enthusiasts with a dynamic environment. The Gold Price Outlook for 2024 looks quite on the upside but the path is not without challenges.
The World Gold Council has published a report on the outlook of gold market worldwide in 2024. According to the report, gold had a strong 2023, defying expectations amid a high interest rate environment, and outperforming commodities, bonds and most stock markets. As we look forward to 2024, investors will likely see one of three scenarios: a soft landing, a hard landing, or a recession. Market consensus anticipates a soft landing in the US, which should also positively affect the global economy. Historically, soft landing environments have not been particularly attractive for gold, resulting in flat to slightly negative returns. However, every cycle is different. This time around, heightened geopolitical tensions in a key election year for many major economies, combined with continued central bank buying could provide additional support for gold. Further, the likelihood of the Fed steering the US economy to a safe landing with interest rates above five percent is by no means certain. And a global recession is still on the cards. This should encourage many investors to hold effective hedges, such as gold, in their portfolios. Late comers might also try to join the party.
J.P. Morgan Research also predicts that gold and silver are forecasted to outshine the rest of the sector in 2024. The Fed cutting cycle and falling U.S. real yields are expected to push gold prices to new nominal highs in the middle of 2024, reaching an average of $2,175/oz by the fourth quarter.
State Street Global Advisors (SSGA) also predicts that the outlook for gold may be buoyed by the turning of three macroeconomic tides: Dovish monetary policy, as US consumer-led economic growth slows and inflation stabilizes.
Various other experts and analysts have predicted that the gold market worldwide is expected to remain strong in 2024, driven by factors such as:
The US Federal Reserve’s monetary policy easing and lower real interest rates, which make gold more attractive as a store of value and a hedge against inflation.
The continued demand for gold from central banks, especially in emerging markets, as a way to diversify their reserves and enhance their financial stability.
The heightened geopolitical tensions and uncertainties in a key election year for many major economies, such as the US, China, India, and Germany, which increase the risk appetite for safe-haven assets like gold.
The potential supply constraints and disruptions in the gold mining industry, due to environmental and social challenges, regulatory changes, and Covid-19 related impacts.
Based on these factors, the average gold price forecast for 2024 ranges from $1,700 to $2,175 per ounce, depending on the economic scenario and the assumptions used by different sources.
The table below summarizes some of the key forecasts from various sources:
Over all the outlook for gold in 2024 is positive, with the potential for new nominal highs. However, the actual performance of gold will depend on a variety of factors, including the economic and social context of the country in question.
The allure of gold as a safe haven and a hedge against inflation has stood the test of time, and as we look towards the future, its role as a store of value seems very strong. While the global economic stage may witness fluctuations and uncertainties, the intrinsic qualities of gold – rarity, durability, and universal desirability – will continue to position it as a cornerstone in diversified investment portfolios.
