The price of gold is on a date with record levels soon
Gold prices are heading to rise and reach their highest levels ever in 2024 on the back of the expected low interest rate by the Federal Reserve, and looming recession fears that usually raise the value of the yellow metal, which is considered a safe haven for investors.
Gold prices hit a record high in last Tuesday’s session at $2,072.5, according to Refinitiv data.
Analysts, who spoke in an interview with “US CNBC”, say that gold can exceed this level and exceed the record.
In this context, Bart Melek, Managing Director and Chief Commodity Strategist at TD Securities, said: “I see gold moving above $2,100 in late 2023 and early 2024,” and attributed his optimism to a possible pause in the US Federal Reserve’s tightening cycle.
“I am bullish on gold because I think the Fed will change policy away from the current tightening. I think this (rate cut) will happen before the 2% inflation target is reached.
Gold has outperformed most other major asset classes in the past 12 months, Melek said in a recent report, which he attributes to the yellow metal’s ability to resist rising interest rates and its value as a safe haven against inflation.
Some analysts are particularly bullish on gold, calling for a price target of $2,500 by the end of next year, about 26% higher than current levels.
“My target is $2,500 by the end of 2024,” said David Neuhauser, founder of Livermore Partners. “This is due to the fact that recessionary forces may take hold later this year and gain strength in 2024.” “2024 is when I see gold prices explode and reach new highs.”
Neuhauser predicted the continuation of stagflation in the global economy during the next few years, as inflation drops to between 3% to 5%.
Gold tends to perform well in periods of economic uncertainty such as recessions and stagflation because it is considered a safe haven and is often used as a hedge against inflation.
Wheaton Precious Metals CEO Randy Smallwood also said: “I’m pretty confident that in a couple of years, we’ll see gold at $2,500.”
“Any kind of recessionary move would be positive for gold,” he said, adding that he sees weakness in the Chinese and US economies.
On the other hand, UOB Bank expects gold prices to reach new records by the second half of 2024.