Alexander Zumpfe

Monetary policy in the US will be key for the gold price this year. Anticipated interest rate cuts in the US and Eurozone could enhance gold’s appeal, as lower yields make non-yielding bullion attractive. With lower interest rates, a weaker dollar is expected, which will also help to support the gold price. India’s robust economic outlook could boost jewellery demand, countering weaker demand in the West and in China. With geopolitical issues adding to economic uncertainty, investment demand is likely to be robust and record gold prices are expected.

Three key factors impacting the gold price in 2024: interest rate trends, anticipated rate cuts in the US and Eurozone leading to lower yields and a stronger appeal for gold; investor behaviour shifts, potential increase in gold ETF inflows and bar and coin demand, influenced by rising prices and changing market sentiments; central bank buying patterns - continued robust buying by central banks, particularly in emerging markets, adding a substantial floor to gold demand.

Silver’s forecast in 2024 is influenced by its dual role as a precious and industrial metal. Lower interest rates could boost prices, but economic struggles might dampen industrial demand. Photovoltaic demand could hit new highs in 2024, although growth may slow after a very strong year for installations in 2023. However, other industrial uses may not have such strong demand as the global economy remains relatively weak. Silver is expected to follow gold higher but may not reach record highs as it is held back by overall weaker industrial demand.

Platinum supply could edge lower this year as primary production is impacted by cost-cutting measures, as miners’ margins are squeezed by the low PGM prices and recycling continues to be lacklustre. Although autocatalyst demand is predicted to be stable, it is at risk from recessions in the US and Europe that could reduce vehicle production. A general election in South Africa could be contentious as the ANC is at risk of losing its majority for the first time. This may weaken the rand, which would reduce support for the platinum price. Even with constrained supply, economic weakness is likely to lower demand and result in a subdued platinum price.

The palladium price is expected to be volatile this year. Automakers’ purchasing should improve as excess metal stocks have been run down after light-vehicle production exceeded expectations last year. There is a risk of supply cuts in North America where the falling palladium price has made production loss-making, which would tighten the market and boost the price, particularly as autocatalyst recycling is predicted to remain subdued. Economic factors and shifts in the automotive industry, particularly the rise of BEVs, will significantly impact palladium demand and prices. Despite the market deficit, lack of demand growth could limit price support.