Gold a safe haven

Could gold prices reach new all-time highs in 2024?

Some expect gold to above climb $2,500

Gold prices are on track to rally to all-time highs in 2024 on the back of interest rates increases, inflation fear, looming recessionary concerns and geo-political unrest.

The precious metal is always sought after as a safe haven asset. The gold price hit a record intraday high of $2,072.5 on 7th August 2020, according to data. Some analysts say it could surpass that level and push beyond the record.

Another positive driver for gold is an anticipated peak in Fed rate hiking cycle as well as upcoming topping out of U.S. dollar strength.

Gold usually performs well during uncertain times

  • Gold tends to perform well in periods of economic uncertainty such as recessions and stagflation due to its status as a reliable store of value.
  • Gold is often used as a hedge against inflation.
  • Any type of recessionary move would be positive for gold.
  • Gold should trade higher when interest rates stop rising and the dollar retreats.
  • As interest rates rise, demand for gold drops as alternative investments like bonds become more appealing and yield better returns. These may now have peaked.
  • Gold prices tend to have an inverse relationship with interest rates.
  • Central bank purchases of gold have been consistently strong, alongside consumer demand for the precious metal.

Gold price year on year

  • Some analysts are particularly bullish on gold and have called for a target of $2,500 by the end of next year.
  • There has been a return of physical gold jewellery demand from China and India as both economies improve and retail spending returns.
  • First quarter gold jewellery demand in China was reported just shy of 200 tons. Analysts project more than 700 tons of jewellery demand from China by the end of 2023.
  • Chinese retail gold demand has been resilient in 2023 even as consumption of other commodities remained weak.

The target is $2,500 by the end of 2024

Much of this has to do with the fact that recessionary forces may take hold beginning early in 2024.

Let’s watch and see.

NOTE: This is not investment advice!

You must, as always do your own careful research before making an investment.


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