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Gold: Climbing to New Heights in 2024
As global tensions, economic uncertnties, and market volatility have soared, gold has reached record-highs this year. This precious metal is set for a remarkable performance next year, driven by safe-haven demand and the Federal Reserve's interest rate outlook. We project that prices will remn above $2,000 per ounce in 2024.
Ewa Manthey
Commodities Strategist
In the latter part of this year, gold surged to unprecedented heights, fueled by a surge in safe-haven demand and speculation about potential US interest rate cuts. Concerns over Middle East unrest, particularly following the outbreak between Israel and Hamas on 7 October, saw gold touch its previous peak of around $2,075 per ounce from March 2020. Even though these geopolitical concerns have since waned, gold has remned resilient, supported by a weakening US dollar and expectations of lower interest rates in the United States. This led to prices reaching another record high at the beginning of December.
Safe Haven Demand Resurges
The World Gold Council anticipates that central banks will continue purchasing gold throughout 2024 due to ongoing economic uncertnties coupled with high inflation pressures worldwide. We expect this demand, along with its potential for growth amid instability and a challenging global economic climate, to keep the price of gold moving upwards.
US Dollar's Role in Price Dynamics
The dollar's performance is set to play a critical role in determining the direction of gold prices in 2024. As US monetary policy continues to adjust, we predict that the weakening of the dollar will provide tlwinds for gold as it strengthens its position as a safe haven asset.
Geopolitical Instability and Tensions
The potential for escalating tensions in geopolitics could also create upside risks for the gold market next year. Increased instability may prompt investors to shift their assets into gold, thus potentially lifting prices further.
Fed's Rate Cut Expectations
Our forecast suggests that if the Federal Reserve begins cutting interest rates as early as the second quarter of 2024, we can expect to see average quarterly gold prices reach $2,100 per ounce and an annual average price of $2,031 per ounce for the year.
Downside Risks
While a stronger dollar could dampen the gold market's growth, given that it could persist longer than expected, this remns our primary risk factor. Conversely, heightened geopolitical tensions might offer additional upside to the gold sector next year.
The Forecast Unveiled
In , 2024 looks promising for gold buyers and investors alike with prices set for fresh highs driven by a weaker US dollar and sustned demand from both central banks and markets seeking safe haven assets amidst ongoing global uncertnties. Our outlook underscores the resilience of gold as an investment in volatile times.
Stay tuned for more insights on our commodities research page, where we provide comprehensive analysis and forecasts to help you navigate market conditions.
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Gold Prices Forecast for 2024 Safe Haven Demand in Markets US Dollars Role in Gold Geopolitical Instability Impact on Gold Federal Reserve Interest Rates Outlook Central Bank Purchases of Gold