Gold prices have been on the rise this week and are expected to continue their upward trajectory in 2024. Analysts predict a 6% increase in the price of gold over the next 12 months, reaching $2,175 per ounce. This positive outlook is driven by factors such as falling interest rates in the US, strong demand from Central Banks in countries like China and India, geopolitical tensions, and robust retail interest.
Chinese Central Bank’s significant gold purchases reflect a shift towards diversifying reserves away from the US dollar, while Chinese citizens are also increasingly investing in gold. This trend is seen as a move away from real estate investments towards gold, which has shown stronger performance than the S&P 500 in the 21st century.
The decrease in interest rates expected in the second half of the year is anticipated to have a bullish effect on gold prices, with a 100-basis point decline in US two-year rates potentially leading to a 3% increase in the price of gold. In terms of production, North America is viewed as a safe haven for gold exploration and production expansion due to concerns about the steady supply of strategic minerals.
Given the anticipated rise in gold prices, companies focusing on gold mining and exploration are expected to benefit. Examples include Endeavour Mining PLC, Steppe Gold Ltd, Troilus Gold Corp, US Gold Corp, Soma Gold Corp, and Sonoro Gold Corp. These companies have various projects in regions such as West Africa, Mongolia, Quebec, Wyoming, Colombia, and Mexico, all poised to capitalize on the positive outlook for gold prices. Additional insight into specific projects, production targets, and exploration plans for these companies could provide further context for investors looking to capitalize on the rising gold market.
