What is the outlook for gold in 2024?
According to the consensus forecast, gold could reach $2,210 per ounce by Q4 2024.
2023 was a remarkable year for gold despite a lack of interest from institutional investors. The precious metal reached a high of $2,135 per ounce, according to the LBMA. Although its nominal level is high, when adjusted for inflation, gold remains 15% below its August 2020 peak.
Speculative positioning in gold futures fluctuated but ended the year at 217,000 contracts, suggesting an improvement in investor sentiment. Central bank demand for gold remains robust, with a trend toward exceeding 2022 levels.
The end of 2023 saw a rise in metal prices, but expectations of interest rate cuts by the Federal Reserve were tempered in early January 2024. The resilient U.S. economic outlook could influence the Federal Reserve’s communication.
Despite a possible temporary decline in Q1 2024, gold could rebound as rate cuts are implemented, potentially targeting a new all-time high of $2,210 per ounce by the end of the year.
Central Bank Demand for Gold: In 2023, central bank demand for gold was on track to exceed 2022 levels. Geopolitical tensions, particularly in the Middle East, and China’s actions are helping to sustain demand.
Retrospective Analysis of Gold: In 2023, despite rising bond yields, gold was supported by easing headwinds, high inflation levels, and a weakening U.S. dollar. The WisdomTree model indicates a convergence between forecasts and actual prices by the end of 2023.
According to the consensus scenario, gold could reach $2,210 per ounce by Q4 2024. The bullish and bearish scenarios project higher prices ($2,455 per ounce) and lower prices ($1,830 per ounce), respectively, depending on macroeconomic variables.
