Gold 2024 Outlook

2023 saw the breakdown in correlations between the price of gold and physically backed ETFs, Central bank balance sheets and US yields. We calculate that the former two factors were pointing towards a $400/oz drop in the price of gold. Prices actually rallied mainly because of cumulated inflation, the DXY’s weakness, strong central bank demand for gold and most importantly market expectations surrounding future rate cuts. Into 2024, the decline in rates and the DXY, which will also support physical demand, should more than offset the negative impact of declining central banks’ balance sheets and YoY inflation. It is also worth noting that although rates will be dropping, they will remain relatively high (even in real terms) when compared to the past decade’s levels. Our model anticipates a further increase in the price of gold and we could see prices hitting a high of $2,100/oz towards the end of the year . On annual basis , we expect to see prices averaging $2,060/oz.