[Beijing time] With the multiple challenges and uncertainties in the global economy, the gold market will become the focus of investors in 2024. Analysts predict that gold prices are expected to hit a record high in the first half of this year, with prices expected to fluctuate between $1,900 and $2,200, and may hit a high of $2,200.
The global economic environment is undergoing complex changes, including factors such as interest rate hikes and geopolitical tensions, which may lead to an increased risk of economic recession. In particular, the Federal Reserve may continue to raise interest rates after experiencing a soft landing, which may lead to a hard landing for the economy in the future, similar to the situation in the late 1960s. In this context, gold, as a traditional safe-haven asset, is valued by investors.
The price of gold is not only affected by investment flows, but also gold jewelry and technological processing, as well as central bank gold purchase demand, are also important factors in its price fluctuations. In addition, factors such as economic expansion, risk and uncertainty, opportunity costs, and trend momentum, combined with GDP, inflation, interest rates, U.S. dollar, and event risks in the macroeconomic environment, jointly affect gold prices.
According to analysis by Nicky Shiels, metals strategist at MKS PAMP, gold has the potential to reach a new all-time high in 2024. The only question is how high gold prices may rise. Her base case forecast is that gold prices will trade between $1,900 and $2,200, possibly reaching a high of $2,200 in the first half of this year. In addition, there is also the possibility of gold prices rising to $2,500, which will be affected by the Federal Reserve’s monetary policy, geopolitical uncertainty, and the continued de-dollarization trend.
The supply and demand situation in the global gold market shows that the volatility of global gold reserves has decreased, while production has returned to growth. Gold demand will achieve strong growth in 2022, with jewelry becoming the main demand area.
Based on the above analysis, despite some uncertainties and challenges, the gold market still shows strong growth potential in 2024. Investors should consider its value as a hedging tool for economic and geopolitical risks when allocating gold, and they need to pay attention to global macroeconomic dynamics and central bank policies. When investing in gold, sound risk management and regular assessment of market conditions are crucial.
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