(CTN News) – Investors in gold are eagerly awaiting a rise in prices next year, as several factors are expected to support the market.
These factors include a shift towards lower interest rates in the United States, ongoing geopolitical risks, and continued buying by central banks.
Despite a volatile year in 2023, it is projected that spot gold will experience an impressive 13% annual increase, making it the best year since 2020. Currently, it is being traded at around $2,060 per ounce.
Looking ahead to 2024, experts predict that the positive momentum will continue. Ole Hansen from Saxo Bank believes that there will be further price gains driven by three main factors. Firstly, hedge funds chasing momentum are expected to contribute to the surge in prices.
Additionally, central banks will continue to purchase physical gold at a steady pace. Lastly, there will be renewed demand from ETF investors, which will further strengthen the market.
On December 4th, gold reached a new record high of $2,135.40. This was largely influenced by expectations of the United States easing its monetary policy in early 2024, following a perceived dovish stance from Federal Reserve Chair Jerome Powell.
The previous record set in 2020 was exceeded by this.
Gold prices came close to reaching new highs in May but were hindered by a US banking crisis. However, a surge in demand due to the Israel-Hamas conflict sparked another rally. Investors flocked to the SPDR Gold Shares ETF, resulting in over $1 billion in net inflows in November.
A Reuters poll predicts gold prices will average $1,986.50 in 2024, surpassing this year’s average of $1,950. J.P. Morgan expects a significant rally in mid-2024, with a peak of $2,300, driven by rate cuts.
UBS forecasts a record price of $2,150 by the end of 2024. The World Council projects a 4% gain for gold if there are rate cuts and a decrease in longer maturity yields.
Risks associated with inflation.
Analysts predict that geopolitical conflicts, election uncertainty, and central bank purchases will increase the appeal of gold as a safe-haven asset.
However, if inflation rises and the Federal Reserve changes its policy plans, gold may lose some of its gains. Heraeus Metals expects higher jewelry demand in China, while silver is expected to decline in 2023 but trend towards $26 an ounce in 2024.
Platinum is projected to fall in 2023 and hold a range between $800 and $1,100 an ounce in 2024. Palladium has been impacted by the energy transition but has recovered.
However, as electric vehicles become more popular, palladium may face surpluses. Bank of America expects palladium to average $750 per ounce in 2024.