The price of gold recently benefited from increasing expectations of the US Federal Reserve to cut interest rates. We expect that the interest rate turnaround will indeed begin in May of the new year and that US interest rates will fall by a total of 150 basis points by the end of 2024. This should give the gold price a good boost. We expect it to reach a new all-time high of around $2,150 per troy ounce later this year. Silver is likely to rise somewhat more than gold in the new year because it has catch-up potential and, in addition to the upcoming US interest rate cuts, also benefits from the decarbonization megatrend.
The Gold price rose to a new record high of $2,135 per troy ounce at the beginning of December, but then fell back by more than $100. Gold has increased in price by 12 percent since the beginning of 2023, making it one of the best price developments in 2023 among exchange-traded raw materials. This might come as a surprise at first glance because inflation rates in the major economic areas have been on the decline for around a year and gold is therefore likely to be less in demand as an inflation hedge. In addition, US bond yields rose to their highest level in 16 years in October, making gold less attractive as an interest-free investment. The fact that gold was not the preferred choice from an investor’s perspective in 2023 is also shown by the development of gold ETFs, which recorded outflows for six months in a row up to and including November and whose holdings have fallen by 235 tons since the beginning of 2023, according to the World Gold Council (WGC).