According to commodities analysts at JPMorgan, gold prices are expected to hold above $2,000 per ounce in 2024, benefitting from additional rate cuts and a return of investment demand. The investment bank remains bullish on gold and silver, noting that economic and geopolitical uncertainty tend to drive demand for gold as a safe-haven asset. Additionally, a weaker U.S. dollar and lower U.S. interest rates increase the appeal of non-yielding bullion.
The analysts also anticipate a Fed pivot, which has historically played a key role in driving gold prices. They predict that gold and silver will see a breakout rally in mid-2024 as U.S. GDP growth slows. JPMorgan Research now projects the Fed to deliver 125 basis points of cuts over the second half of 2024, which is 25 bps more than previously projected. Their gold price predictions are based on a outlook that sees core inflation moderating to 2.4% in 2024 and 2.2% in 2025.
The analysts believe that central bank buying and positive net ETF flows will support gold prices through 2024. They also expect increased investor appetite to contribute to a gold rally in 2024. As rates eventually come down, they anticipate recent ETF outflows to reverse, with a return to retail-led ETF inflows boosting gold investor demand and strengthening a move higher in prices.
It is evident that gold will remain an attractive asset for investors in 2024, with potential for prices to rally and reach new nominal highs in the second half of the year. As economic and geopolitical uncertainty persist, gold will continue to be a sought-after safe-haven asset. Additionally, the potential for a Fed pivot and lower U.S. interest rates will further support the precious metal, making it a noteworthy option for investors looking to diversify their portfolios.
