As we prepare to welcome 2024, the outlook for gold is optimistic. The future price of gold will be influenced by a combination of factors, including the monetary policies of major central banks such as the US Federal Reserve. It also depends on the geopolitical landscape, trends in the dollar index, global growth momentum, elections in major economies, and the gold acquisition spree by central banks.
In 2024, gold is expected to maintain its appeal within the complex macroeconomic environment. The US Federal Reserve has signaled the conclusion of its aggressive rate-hike program and is expected to embark on a path of rate cuts with an anticipated three reductions throughout the year, starting as early as March 2024. The potential rate cuts could lead to a decline in US bond yields, thus strengthening the outlook for gold.
According to the IMF, global economic growth is expected to decelerate due to the aggressive rate hikes by key central banks since 2022, leading to an increased allocation towards gold as a reliable store of value. Gold’s appeal is also expected to persist, particularly in the event of any escalation in Middle Eastern tensions, making it a desirable safe-haven asset. Furthermore, central banks have been consistently buying gold over the past 13 years, indicating an accelerating de-dollarization trend and providing valuable insights into the demand outlook for gold in 2024.
Despite the upward incline in gold prices, intermittent corrective phases are expected, and key support levels for gold are estimated at ₹59,500 and ₹58,700 per 10 gm. However, as prices dip, the buying interest is likely to increase, potentially driving prices to new record highs of around ₹72,000 per 10 gm.
Similarly, silver’s appeal remains strong in 2024, driven by robust industrial demand from the global transition to green energy. It is expected to conclude its third consecutive year in deficit, with support and resistance levels in place.
Additional Insight: It appears that the outlook for both gold and silver in 2024 is largely positive, with various factors working in favor of these precious metals. The potential rate cuts by the US Federal Reserve and geopolitical tensions are expected to drive gold prices higher, while the industrial demand for silver is anticipated to support its price momentum. Furthermore, the consistent gold acquisition by central banks indicates a sustained interest in these precious metals, adding further support to their outlook for the coming year.
