World gold prices may reach a new peak in 2024

Next year's gold price could set a new record, as the US reduces interest rates, geopolitical tensions and central banks continue to buy.

Closing the last trading session of the year, the world spot gold price decreased by 4 USD, to 2,062 USD per ounce. However, for the whole year, prices still increased by 13%, recording the best year since 2020.

"After an unexpectedly exciting 2023, we forecast that the upward trend will continue into 2024, thanks to the buying power of investment funds and central banks," said Olen Hansen - analyst at Saxo Bank. . SPDR Gold Shares - the world's largest gold trust fund - net bought more than $1 billion in gold in November.

World gold prices this year have had many fluctuations. At the beginning of the year, prices increased due to the local banking crisis in the US. But by October, the price was only $1,800. The market accelerated again in the last 2 months of the year, due to conflict in the Middle East and forecasts of interest rates in the US decreasing from next year.

On December 4, world gold prices reached a historic peak at 2,135 USD per ounce, as investors expected the US Federal Reserve (Fed) to loosen monetary policy. This new record surpasses 2020.

A Reuters survey in October found the average price in 2024 was just $1,986. However, this year, the average price was 1,950 USD, the highest ever.

JP Morgan predicts that gold prices will "speed up" in the middle of next year, possibly reaching 2,300 USD thanks to expectations of reduced interest rates. UBS believes that the price will reach 2,150 USD by the end of next year if countries actually reduce interest rates.

In its 2024 outlook report, the World Gold Council (WGC) forecasts that if interest rates decrease by 75-100 basis points (0.75-1%), gold prices will increase by 4%.

Analysts also believe that conflicts in the Middle East, instability from elections in major economies next year, and purchasing power of central banks, led by China, will drag down shelter demand this year. come up high.

Particularly in China - the world's leading gold consuming market, Heraeus Metals believes that the demand for gold jewelry here is increasing this year. This trend may last into next year, thanks to stimulus policies from authorities.

However, "prices could still go down if inflation accelerates again, forcing the Fed to abandon its intention to shift policy direction," said Han Tan - market analyst at Exinity. Besides, if inflation cools faster than the Fed's rate of interest rate reduction, the economy will also decelerate, thereby reducing the need to buy gold.