Gold price outlook 2024: As we welcome the dawn of 2024, the outlook for gold appears promising, poised to be shaped by a complex interplay of several variables. One pivotal determinant of gold prices in the coming year will be the monetary policies enacted by major central banks, notably the US Federal Reserve. 

Alongside this, the geopolitical landscape, trends in the dollar index, global growth momentum, uncertainty stemming from elections in major economies, and the ongoing gold acquisition spree by central banks will collectively shape the path of gold.

Gold to sustain its allure in 2024

Building on a robust performance with returns of around 15% in 2023, gold is positioned to sustain its allure in 2024 within the intricate macroeconomic environment. The US Federal Reserve has pivoted its policy stance, signalling the conclusion of its most aggressive rate-hike program. With inflation showing signs of significant moderation, the central bank is expected to embark on a path of rate cuts in 2024, with three reductions anticipated throughout the year. Markets are already factoring in a potential rate cut as early as March 2024. This shift could exert downward pressure on the dollar index, leading to a further decline in US bond yields, thus bolstering the overall outlook for gold.

According to the IMF, global economic growth is poised to decelerate due to the assertive rate hikes by key central banks since 2022. This scenario favors increased allocation towards gold as a reliable store of value. The enduring interest in gold is expected to persist, particularly in the event of any escalation in Middle Eastern tensions, further enhancing gold’s appeal as a safe-haven asset. Central banks have been consistently buying gold over the past 13 years, accumulating significant reserves in recent times. This inclination toward gold among central banks provides insights into the accelerating de-dollarization trend and serves as a valuable indicator for the demand outlook in the upcoming year. Additionally, the mounting US debt and the associated high debt-servicing costs underscore potential risks to financial and economic stability, contributing positively to the precious metal’s value.

While the trajectory for gold leans towards an upward incline, intermittent corrective phases are anticipated. Key support levels for gold are pegged at 59,500 and 58,700 per 10 gm. Dips in prices are likely to entice buying interest, potentially propelling prices to new record highs of around 72,000 per 10 gm in the year ahead.

Silver price target 2024

The appeal of silver also remains strong, fueled by robust industrial demand driven by the global transition to green energy. The silver market is expected to conclude its third consecutive year in deficit. Having traded in a range of $20-$26 per ounce in 2023, a sustained move beyond $26 per ounce or 78,500 per kg level could trigger strong momentum toward the $30 per ounce or Rs. 85,000-88,000 per kg range. Conversely, support levels are placed at Rs70,000 per kg, followed by 66,500 per kg.

(Author is a SEBI certified research analyst and founder of WealthWave Insights)

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Published: 30 Dec 2023, 01:38 PM IST



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