Gold Price Forecast 2024

As we pass the mid-point of the year, many investors are turning to 2024 and wondering what the gold price will do next year. While less volatile than 2022, 2023 still saw some strong gains in the gold price, and the precious metal even tested the all-time high in May due to the banking mini crisis.

The struggles of businesses and banks reflects the cost-of-living crisis endured by many around the world, as high inflation and rising interest rates continues to dominate the current economic landscape.

Unsurprisingly then, there is plenty of opportunity for the gold price to move in 2024, though forecasts vary on the direction and severity of these moves. Below we discuss the main factors that are driving any gold price forecast in 2024. As always, we must stress a forecast is just that, and no one knows what will happen to the gold price in the future as the past few years have proven. We will of course update this forecast should any significant event result in any major revisions to the forecasts for 2024.

Gold Price in 2024

The gold price in 2024 will largely be driven by the same factors as those of 2023, though the global economy finds itself in a very different place going into next year. Inflation and interest rates, the strength of the dollar, and geopolitical concerns remain at the top of the list of issues for investors to monitor. Each one has the potential to move the gold price in 2024, and the combination of said issues could have a profound effect up or down.

US Interest Rates

Following many months of consecutive hikes, interest rates in the US could be close to peaking. The Federal Reserve have paused at their latest meeting but indicated that there could one or two more hikes to come. In either case, the tightening cycle is expected to end in 2023, and by 2024 US rates should have peaked.

It is currently unclear whether we’ll be entering a long hold period on rates – in which the Fed keep rates at current levels – or whether they pivot to cutting rates. This will all depend on how strongly the economy reacts to the current high rates as discussed in more detail below.

If rates should need to rise any higher than expected this could see further headwinds for gold and push the price down. If rates peak, but hold at high levels for much of 2024, then this would maintain the current gold price. If the Fed are forced to start cutting rates then this would push the dollar down and gold up.

Other central banks, such as the Bank of England and European Central Banks are expected to keep increasing interest rates for longer than the Fed, and this will have a similar impact on domestic prices – higher rates, stronger currency, lower gold price.

Update April 2024 – Inflation has proved to be persistent, and expectations for a US rate cut now are centred around September 2024 according to the CME FedWatch Tool. This delayed date for the first rate cut has kept bond yields and the dollar high, but 2024 is still expected to see rate cuts, and with it a weakening dollar and rising gold price.

Recessions

As discussed above, a key driver on US interest rates, and therefore gold prices, will be the potential for recessions and other forms of economic downturn. There is currently some market expectations for a mild recession in the US and UK in 2024, but it is unclear how severe this could be. Some economic indications suggest a strong jobs market and consumer spending, but there are signs of a looming recession, which is of course by-and-large the likely outcome, and even goal, of high interest rates in the first place.

The Fed could manage a soft landing; avoiding the worst of any recession, bringing inflation down and reducing interest rates slowly, which could work against gold. A harder landing, and quick pivot on rates would be more supportive for gold. In a long-term high interest rate environment, there could be a further deterioration in economic conditions quite quickly, with more defaults on over-leveraged institutions, similar to the mini banking crisis earlier this year.

The worse any economic volatility is, the more investors will turn to a safe haven, highly liquid asset like gold. This would then combine with the Fed having to stimulate the economy with lower interest rates and could easily push gold to new all-time highs.

Geopolitics

The invasion of Ukraine in 2022 was a key driver for the gold price and remains in the minds of many investors, and a potential driver for the gold price in 2024. Recent weeks have seen increased instability in Eastern Europe, such as the brief mutiny by Russian mercenary group Wagner, and the ongoing efforts to bring Ukraine into NATO and the implications this could have on the war at large. It is unclear what kind of end is in sight for the war between the two countries, or whether NATO members could be dragged into a worse conflict.

China also remains an ongoing concern. Despite some high-profile meetings, the trade war rumbles on after several years. China has recently announced it is limiting the export of key materials vital to chip manufacturing. China’s dispute over Taiwan of course also remains a potential threat, although the US has recently watered down its comments on defending Taiwan’s independence.

BRICS are also working to move away from the dollar and have even confirmed a desire to start a new gold-backed currency. Should this happen, it could have profound implications for gold, both due to its normal dollar denomination, and due to increased demand should a large gold-backed currency return to the world stage in 2024.

Update April 2024 – The outbreak of war in the Middle East in October 2023 continues to drive geopolitical concerns. April 2024 has seen Iran launch attacks directly on Israel, prompting promises of retaliation. Further escalation of the conflict remains highly probable, and will have far-reaching effects, including on shipping, further driving inflation higher.

Central Bank Demand

2022 was a record year of gold reserve purchases from central banks, and could be another key driver of the gold price in 2024. 2023 has seen a slightly mixed picture so far however, with some banks continuing to buy, but others selling. Overall, gold reserves have fallen in 2023, but this has been skewed by Turkey which has sold almost 160 tonnes of their gold reserves so far in 2023, due to very strong demand domestically and a partial ban on importing gold.

With Turkey excluded, central bank buying remains positive. China has also continued to buy gold, in a long-running buying spree started in 2022 as it moves away from the dollar. If economic turmoil does occur then central banks will likely continue to buy gold reserves. If the BRICS gold-backed currencies do take off, then it would be likely that all countries signing up would be making large gold purchases to back their national currencies, pushing gold higher.

Update April 2024 – Central bank buying remains high in 2024, with countries like Turkey, China, Poland, Czech Republic, and Qatar topping the tables. Central bank buying looks to be as supportive for gold as in recent years.

Gold Price Predictions 2024

Below we have gathered a selection of gold price predictions for 2024 from a variety of analysts and experts. Most 2024 gold price predictions so far are based on a longer period of interest rates remaining high, and with only a mild recession, keeping gold at similar levels to the current price of $1,900 per ounce.

We do end up with an average across all 7 forecasts of $2,155.14 per ounce, which would mean a new all-time high. Given gold tested the current high of $2,080 in 2023, a new record certainly seems plausible in 2024.

• ABN Amro - $2,000
• AG Thorson for FX Empire – Target of $3,000
• Natixis - $1,920 average
• UBS - $2,250
• BMI - $1,850
• Trading Economics - $2,016
• Commerzbank - $2,050

Update April 2024 – Gold has enjoyed an explosive rally since the start of March, breaking all-time highs in all currencies by some margin. Gold has already beaten many of the forecasts previously given for 2024, reaching a current record of $2,431.85.

It has been unclear what has driven the price so high, making it uncertain whether gold will keep rising in the near-term or settle into a period of consolidation. With the Middle East conflict only worsening however, US rate cuts expected in Q3/Q4, and one of the most contentious US elections in history, gold is expected to make further gains towards the latter half of the year.

Given the current record, $2,500 per ounce is now the next milestone to beat, and the target of $3,000 by AG Thorson could be well within reach if the recent rally is anything to go by.