Great excitement surrounded gold’s upshot closing out 2023. Reasons for the move are said to be many including the Israel-Hamas and Ukraine-Russia conflicts, major central bank purchasing, and the highest Fed funds rate level in 22 years.

Ongoing economic and geopolitical uncertainty will continue to provide a positive driving force for gold prices, while easing inflation and the recent announcement by the Federal Open Market Committee (FOMC) indicating plans to cut interest rates three times in 2024 are tending to neutralize the upward pressure.

Nevertheless, gold (and silver) remain widely appreciated as a safe haven asset due to their ability to remain a reliable store of value.

Natasha Kaneva, J.P. Morgan’s Head of Global Commodities Strategy, emphasized the impact of economic conditions on commodities. She said, “Commodities are unlikely to benefit from core inflation in 20214. Inflation should fall to under 3%, so that, along with properly timing the business cycle, are two conditions needed to initiate long positions, making the outlook for the sector very tactical in 2024…Across commodities, for the second year, the only structural bullish call we hold is for gold and silver.”

According to J.P. Morgan Research estimates, gold will rise and achieve $2,300/oz. in 2025 if the planned Fed cutting cycle is completed. This projected rise in gold value is expected to provide a better environment for business development and GDP increase, which will contribute to upward pressure for precious metals.

The outlook for gold in 2024 is shaped by a complex interplay of economic and geopolitical factors. Investors should carefully evaluate how ongoing uncertainties may impact gold’s performance and consider the potential benefits of including gold in their investment portfolios.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The precious metals market is highly volatile, and readers should conduct thorough research before making any investment decisions.