Gold Price Forecast For 2024: What Experts and Analysts Say

The financial world of 2023 has witnessed severe monetary policy tightening across many regions to control runaway inflation. Speculation mounts as to whether we’re near the end of this cycle and if so, when will central banks begin to pivot into a more bullish scenario. This macro environment dictates how many asset classes perform, especially precious metals like gold, which is closely linked to the US Dollar. This article is your guide to what leading analysts predict for the year ahead. We will explore the forecasts of gold prices in 2024, using knowledge from top experts and reliable sources.

Think about gold. It’s not just a pretty yellow metal. For ages, it’s been a big player in economies worldwide, often used as a hedge against inflation. It’s in everything from rings to machines. And the tug-of-war between how much gold is available and how much people want it can really shake up its price, especially during economic uncertainty.

Fast forward to 2023. The current trends in central bank buying of gold show strong demand and a growing interest in the precious metal, with several institutions increasing their gold reserves. Gold prices shot up, nearly setting records in May. The reasons? A mix of things. Debates about the US debt ceiling, banking concerns, and a careful stance from the Federal Reserve all had a role. So, what’s on the horizon for this non-yielding asset? What’s our take on gold prices in 2024 and beyond?

We will examine a range of elements that could sway gold prices in 2024. We’ll look at the state of the US economy, the Federal Reserve’s money plans, the power of the US dollar, our thoughts on inflation, risks in global politics, and the general feeling among investors.

Based on what our experts and sources tell us, the price of gold could increase in 2024, hitting around $2,100 per ounce by the time we ring in 2025. But keep in mind that this is an educated guess. The current gold prices and forecasts for gold should guide us, but the economic landscape always offers surprise turns. Things can shift, and there’s always a bit of guesswork involved.

The US economy is a significant driver of gold prices. Its condition influences investor sentiment towards secure assets, their predictions on interest rates, and their perceptions of inflation. The year 2023 witnessed the US economy rebounding from the impacts of the Covid-19 pandemic. However, this recovery wasn’t without its obstacles. These included a shortage of workers, disruptions in supply chains, an escalation in raw material prices, and a slowing pace of consumer spending. Together, these elements contributed to an overall economic deceleration.

As we transition into 2024, we might observe minor disturbances in the US economy, potentially towards the end of 2023 or the start of 2024. The causes could range from the fiscal cliff and issues surrounding the debt ceiling to the Federal Reserve’s sustained tightening of policies.

These changes may temporarily drive up gold prices in the short term as investors seek reliable assets to guard against inflation and financial instability. However, as the economy strengthens and interest rates rise over time, these factors could lead to a subsequent decline in gold prices.

The strength of the US dollar significantly influences gold prices. The two assets compete as the preferred global safe haven. If the Dollar rises, generally the worth of gold will fall and vice versa.In 2023, the US dollar appreciated against most major currencies as The Fed Reserve increased interest rates.

This trend was driven by the need to curb inflation which hit a high of 9.1% in 2022. Meanwhile, increased bond yields, and heightened demand for secure assets, enhanced gold’s allure.

As we look ahead to 2024, the US dollar could maintain its robustness or grow even stronger versus competing currencies. The performance of other economies, particularly China and Europe, and their respective monetary policies will be significant determining factors. Should the dollar remain strong, it might limit the potential increase in gold prices. A strong dollar makes gold more costly and less appealing to international buyers.

However, there’s the possibility that the Fed Reserve could pivot towards the end of 2024 and actually begin to reduce interest rates – a theory shared by much of the market due to US headline inflation falling much faster than in countries like the UK where supply prices remain stubbornly high.

If this happens, then falling base rates in the US will actually curb the Dollar’s appeal for investors as returns will reduce for US Dollar deposits. This possible Dollar weakening could prove to be a catalyst for gold.

Global political risks are potent movers of gold prices. The rise in global uncertainties and downside risks has sparked a surge in demand for gold as a safe-haven asset. The year 2023 experienced relative tranquillity on the global political front.

While there were no significant new conflicts or crises, a few geopolitical issues and financial uncertainties did add to the global apprehension. These included the US-China trade and tech disputes, the Iran nuclear deal, North Korea’s missile tests, and the Russia-Ukraine border conflict.

Peering into 2024, the global political landscape could either maintain its calm or become more turbulent. This largely hinges on the outcomes of various elections, discussions, and events like the US midterm elections, the state of China-Taiwan relations, the progression of the Iran nuclear deal talks, and the global climate summit.

Depending on whether global political risks rise or fall, and if this triggers more or less demand for safe assets like gold, it could either inflate or deflate gold prices in 2024.

With general elections in both the UK and US towards the end of 2024, the need for current administrations in both regions to appeal to voters is likely to impact gold. Voter-friendly policies leading up to the elections, such as tax cuts, can influence the price of gold due to their effect on money supply, currencies and economies.

How investors feel plays a big role in gold prices. It changes the balance between supply and demand in the gold market. In 2023, investors had mixed feelings.

Some were buying gold to hedge against inflation and economic slowdown. But others sold gold to take profits or move to riskier assets.

In 2024, how investors feel could get better or worse. This will depend on what’s happening in the overall market, how other assets like stocks, bonds, and cryptocurrencies are doing, and the outlook for gold.

Depending on whether investors want more or less gold and whether they feel more or less confident about its future, they could either drive up or drag down gold prices in 2024.

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The World Bank, one of the key players among central banks and a global financial institution offering loans and grants to developing nations for various projects, predicts an average gold price of $1,700 per ounce in 2024, a drop from $1,900 per ounce in 2023.

This forecast is built on assumptions about global economic growth, commodity prices, exchange rates, and inflation. Compared to other sources and experts, the World Bank’s forecast is slightly lower than the average consensus forecast of $2,100 per ounce for 2024 but higher than some other forecasts anticipating a steeper decline in gold prices.

Drawing from these expert insights, we anticipate a slight uptick in gold prices for 2024. The average cost could hover around $2,000 per ounce by year’s end. However, it’s crucial to note that this remains a forecast. Things can change, and there’s always a level of uncertainty.
For potential gold investors in the UK, it’s a good idea to have some gold in your portfolio to protect against inflation and geopolitical factors. But before you invest in gold, do your homework. Understand the risks and costs of buying and selling gold. And keep a close eye on market trends and conditions.