Market Insights

Is Gold Poised to Soar in 2024?

Gold Alliance disclaimer
Will gold soar in 2024?

In September 2023, CBS News said, “there are reasons to believe [gold] could break $2,000 again.” 

Shortly thereafter, gold started heading north…  

And on October 27th, a rush of diversification buying triggered by news of tensions in the Middle East pushed gold across the $2,000 mark for the third time in history. 

Now, JPMorgan analysts say gold prices may continue to rise and even break new records in 2024 if interest rates start to fall… 

Which may be a distinct reality based on the Fed’s latest decision. 

At last week’s FOMC (Federal Open Market Committee) meeting, the central bank chose to hold rates between 5.25% and 5.5% until further notice.  

And while they didn’t rule out another hike in 2023, few investors expect another rate surge this year. 

In fact, according to the CME FedWatch tool, investors are pricing in more than a 90% probability that rates will remain unchanged through December. 

Source: CME FedWatch

This means the Fed may believe their efforts have cooled inflation sufficiently and the hard tightening phase may be over. 

Simona Mocuta, chief economist at State Street Global Advisors, agrees and says, “Given both demonstrated and anticipated progress on inflation, the majority of the committee members believe the Fed’s tightening cycle has run its course.” 

For overburdened consumers and borrowers, this sounds like welcome news. Prices could drop. Debts could shrink. Mortage rates could fall and more. 

But for gold owners, a drop in rates may mean more than welcome relief from the Fed’s tightening or the pressures of inflation… 

It may also create a historic window of opportunity to acquire more gold… before it potentially vaults past $2,000 for good. 

Here’s why: 

When interest rates rise, the demand for interest-bearing assets, like bonds, historically also tends to rise, and the demand for non-interest-bearing assets, like gold, tends to lag. 

When interest rates drop — or pause — investors tend to shift into gold. 

And now, as jitters over geopolitical tensions in the Middle East continue to rise, demand for gold may follow. 

It’s a scenario America has faced before… 

Think back to the 1970s, when the world faced high inflation, steep rate hikes… and tensions in the Middle East. 

Capital fled from higher-risk assets positioned near the top of The Pyramid of Risk for the perceived safety of physical gold. 

And the rush of buyers pushed gold’s price through the roof. 

From 1971 to the beginning of 1980, gold soared from a tiny $42 an ounce to $843 an ounce… for a whopping 1,900% gain in less than a decade. 

The price of gold soared 1900 percent from 1971 to early 1980.

Anyone who held, say, $10,000 in gold at the time, saw it turn into $200,000 in gold by 1980. 

Today, the amount of economic uncertainty the world is facing has only increased. And If history repeats, then we may be seeing gold’s price hovering below the $2,000 mark for the last time. 

Morgan Stanley analysts have been watching the Fed’s moves carefully and earlier this year predicted “potentially lower interest rates and central bank buying could support higher gold prices through year-end.” 

And they may be right, because… 

The price of gold is already up over 7.3% year-to-date. The Fed may soon make cuts. And central banks are still hoovering up truckloads of gold.  

As you may recall, global central banks have been buying gold to hedge against inflation and diversify away from a weakening US dollar, which may further threaten the dollar’s purchasing power. 

In other words, the case for gold is growing fast. 

With gold’s long history of rising in price as the dollar’s purchasing power shrinks… 

A tendency to also rise as interest rates drop… 

Growing geopolitical tensions… 

A potential rush of investor capital shifting from higher-risk, interest-bearing assets for the perceived safety of physical gold… 

And gold hovering just below $2,000 right now… 

The question is: 

Will gold soar in ’24? 

JPMorgan analysts said they believe rate cuts will happen in the third quarter of 2024, and gold may jump to a record-breaking high.  

Davvid Neuhauser, founder of Livermore Partners says, YES: “2024 is when I see gold breaking out and reaching new highs and beyond … My target is $2,500 …” 

And Bank of America analysts also forecast a gold rally… but set a target price of $2,200 an ounce before 2023 ends. 

Of course, the global economic landscape is always shifting, and expert forecasts are only educated guesses. 

But with so much macroeconomic support for gold’s potential breakout and so many experts forecasting historic highs in the coming months, “Now may be a good time,” Morgan Stanley says, “to add [gold] to your portfolio.” 

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