Gold to maintain upward trajectory in 2024, ended CY23 with 15% return

With the MCX spot gold prices at Rs 62,939 per 10 grams ($2,063 per ounce in international markets), the yellow metal ended 2023 on a strong note with returns of 15 per cent. Experts expect the yellow metal to maintain its impressive run in 2024 on the back of triggers such as the moderation in US economic growth, expectation of rate cuts this year and continued buying from central banks.

A PTI report, quoting Commtrendz Research Director Gnanasekar Thiagarajan, expects gold to rise to $2,400 in 2024 and if the rupee is stable it could hit Rs 70,000 levels. Brokerages highlight the key factors which will influence the outlook of the precious metal in 2024

Kotak Securities 
 

Market sentiments are pricing in a full 25 basis points rate cut as early as June, which is anticipated to serve as a significant trigger for prices 
 

Retail jewelry purchases may encounter challenges 

If the current momentum persists, RBI’s demand could surpass last year’s record

The hesitation of ETF investors and speculative buyers to actively participate thus far presents a growing opportunity for price strength in the fourth quarter

The prevailing uncertainties further enhance the appeal of gold as a safe-haven asset
 

Motilal Oswal Research 

Multiple factors such as monetary policy changes, fluctuations in Dollar index, and economic data points could provide triggers 

Even after such aggressive rate hikes, market participants will keep an eye on inflationary concerns 
 

We have already seen the impact of rate cuts on gold and silver prices. However, if data and inflation suggest otherwise, and Fed does not ease the stance as per market expectations, that could cap gains for safe-haven assets 

However, the risk premium on the back of geopolitical tensions, lower Dollar index, higher rate cut expectations, slower growth fears, inflows in ETFs, central bank gold buying spree, and possible rupee depreciation could keep the floor strong

HDFC Securities 

Central banks have increased their gold reserves. China needs to add gold reserves to add acceptability of Yuan for trade across countries

Speculative positioning, which reflects the mood in the gold market, improved in the fourth quarter of 2023 as spot prices rose amid the Israel-Hamas conflict

Despite higher spot prices, total holdings in bullion-backed ETFs have continued to fall in 2023. Looking ahead, they see a rebound of investor interest and a return to net inflows as gold prices rise and Fed policy pivots

Fed policy will continue to shape the outlook for gold prices in the coming year