According to a recent report by the World Gold Council, the price of gold is expected to remain elevated in 2024. This forecast is attributed to a resilient global economy and continued purchases by central banks. The Council anticipates a “soft landing” for the U.S. economy, which would be beneficial for the global economy and further bolster the price of gold, already at record levels.
The report also highlights the expected increase in central bank reserves of gold in 2024. Central banks have been a significant source of demand in the gold market in recent years, with 2023 being a record year. The World Gold Council anticipates that this trend will carry over into 2024, potentially contributing to a boost in gold prices.
Additionally, the World Gold Council estimates that central bank demand contributed 10% or more to the price of gold in 2023. Even if 2024 does not reach the same heights, above-trend buying is still projected to positively impact gold prices.
The price of gold recently hit a record high, surpassing $2,100 U.S. per ounce for the first time. This milestone was achieved following a period of rallying in response to geopolitical tensions. Although the price has slightly pulled back and is currently trading near $2,050 U.S. per ounce, the overall outlook for gold remains optimistic.
Insight: The expected increase in central bank reserves of gold in 2024 suggests a continued strong demand for the precious metal. This reinforces the perception of gold as a safe-haven asset and indicates ongoing confidence in its value as a long-term investment. Additionally, the geopolitical tensions that led to a recent rally in gold prices highlight the metal’s role as a hedge against uncertainty and volatility in global events.
