Precious Metals Forecast: Gold, Silver, and Platinum in 2024
The gold market is poised for a remarkable year in 2024, building on its exceptional performance in 2023. The yellow metal is on track to post a 13% annual rise in 2023, reaching a trading price of around $2,060 per ounce, marking its best year since 2020. According to Ole Hansen, a commodity strategist at Saxo Bank, further price gains are anticipated in 2024, driven by a trifecta of factors. These include momentum chasing hedge funds, sustained central bank gold purchases, and a resurgence in demand from ETF investors. Notably, gold hit a record high of $2,135.40 in December 2023, driven by expectations of U.S. monetary policy easing.
The outlook for gold in 2024 is bolstered by several factors. A dovish pivot in U.S. interest rates is expected to support gold prices, with expectations of a potential “breakout rally” in mid-2024, as forecasted by J.P. Morgan. Additionally, the World Gold Council projected that a 4% gain for gold could result from a drop of about 40 to 50 basis points in longer maturity yields following 75-100 points of rate cuts. This underlines the sensitivity of gold prices to interest rate movements. Furthermore, geopolitical tensions, such as the conflict in the Middle East, and uncertainty stemming from elections in major economies, are anticipated to bolster gold’s appeal in 2024.
The demand for gold is also expected to be underpinned by central bank purchases. The World Gold Council highlighted that central banks have been acquiring physical gold at a firm pace, contributing to the positive outlook for gold in 2024. Moreover, the SPDR Gold Shares exchange-traded fund (GLD.N) posted net inflows of over $1 billion in November, indicating sustained interest from institutional investors. Notably, a Reuters poll in October forecasted an average gold price of $1,986.50 in 2024. This consensus among industry experts underscores the positive sentiment surrounding gold’s prospects in the upcoming year.
However, there are potential headwinds that could impact gold prices in 2024. Han Tan, a market analyst at Exinity, cautioned that inflation resurgence could force gold to unwind some of its gains if the Federal Reserve abandons plans for a policy pivot in 2024. This highlights the delicate balance that gold prices may face in the event of unexpected economic developments. Nevertheless, the overall consensus and forecasts point towards a bullish outlook for gold in 2024, with the potential for the precious metal to reach new record highs.
Moving on to silver and platinum, these precious metals are also expected to experience notable developments in 2024. Silver is anticipated to benefit from improved industrial demand, driven by the ongoing economic recovery and the rapid expansion of green technologies. The surge in demand for solar panels, electric vehicles, and 5G infrastructure is expected to bolster silver’s industrial usage, thereby supporting its prices. Meanwhile, platinum’s price range is estimated to be between $800 and $1,100 per ounce in 2024, reflecting the metal’s unique position as both a precious and industrial metal.
Conversely, the impact of the energy transition has led to a significant decline in palladium prices. The rise of electric vehicles has diminished the demand for palladium, which is primarily used in catalytic converters for internal combustion engines. As the automotive industry continues to shift towards electric vehicles, the outlook for palladium remains subdued. This underscores the profound impact of technological and industrial shifts on the dynamics of precious metal markets.
In conclusion, the outlook for gold, silver, and platinum in 2024 is shaped by a combination of macroeconomic, geopolitical, and industrial factors. Gold is anticipated to reach record high prices in 2024, underpinned by a dovish pivot in U.S. interest rates, continued geopolitical risk, and sustained central bank buying. Silver is expected to benefit from improved industrial demand, while platinum’s price range reflects its dual role as a precious and industrial metal. The evolving landscape of precious metals markets underscores the need for investors and industry participants to closely monitor these dynamic developments in the year ahead.
The information provided is for educational and informational purposes only and should not be construed as investment advice.