Nikos Kavalis

We think 2024 will be a year of two halves for gold. During the first six months, we expect its price will come under pressure. The current market consensus sees cumulative policy rate cuts of 1.5% by the Fed in 2024. We think this is far too aggressive and expect that evidence of slower-than-expected rate normalisation in the next few months will boost the dollar and weigh on the yellow metal. By mid-year, we expect the price will trade as low as $1,850, the decline cushioned by healthy central bank demand and bargain hunting from the physical markets.

In contrast, we see a healthy recovery emerging in the second half of the year. By that point, we expect the Fed will both start cutting rates and signal further and accelerated easing in the year ahead. Coupled with ongoing support from central bank buying, as well as persistent economic and geopolitical uncertainties underpinning safe-haven demand, this should fuel a price rally that sees gold returning to $2,100 before year-end. This will result in an average for the year of $1,980, the fifth consecutive record high.