All-time high for gold prices
Gold prices reached a new record high on Monday, hitting $2,100 as bullion continues to attract global demand.
Analysts predicted that gold prices could continue to soar above $2,000 next year due to geopolitical uncertainty, a weaker U.S. dollar, and potential interest rate cuts. The conflict between Israel and Palestine has also contributed to the surge in gold prices.
Positive outlook for gold prices
Market experts believe that the anticipated retreat in the U.S. dollar and potential interest rate cuts will drive gold prices to reach $2,200 by the end of 2024, suggesting a positive outlook for gold in the coming years. Head of metals strategy at precious metals firm MKS PAMP, Nicky Shiels, is bullish on gold’s performance, stating that there is less leverage this time compared to 2011, and predicting that prices could reach $2,200 per ounce.
All that glitters is gold
On Monday, spot gold prices surged to a new record high of $2,110.8 per ounce before experiencing a slight decline. The precious metal is currently trading at $2,084.59 after reaching $2,075.09 on Friday.
Bart Melek, head of commodity strategies at TD Securities, is optimistic about the future of gold prices, expecting them to average $2,100 in the second quarter of 2024 due to strong central bank purchases bolstering prices. A recent survey by the World Gold Council found that 24% of central banks plan to increase their gold reserves in the next year, indicating potentially higher demand for gold in the official sector.
Melek also suggested that a policy pivot by the Fed in 2024 might lead to lower interest rates, which could weaken the U.S. dollar and make gold more affordable for international buyers, thus driving up demand.
Factors driving gold prices
Fed Chairman Jerome Powell’s recent comments indicated the Fed’s stance on interest rates, with a possibility of no further hikes in the near future. BMI, a Fitch Solutions research unit, highlighted potential interest rate cuts by the U.S. Fed, a weaker U.S. dollar, and high levels of geopolitical tension as the main factors buoying gold in 2024.
Overall, the future of gold prices looks promising, with strong demand and various geopolitical and economic factors contributing to the metal’s bullish performance in the global market.
