The price of gold is shining: But what will happen in 2024?

Last Updated: 11. Dezember 2023By

Gold investors had every reason to celebrate in the last few weeks. As you can see in the chart, the precious metal has put on a considerable rally since the beginning of October (in US dollars, as of 08/12/2023, 9:00 am):


The plus between 4 October and 8 December is thus 11.5 percent. For the otherwise sideways running gold price, this increase is quite noteworthy. As a result, the large gold ETFs, the shares of the major miners and some junior miners have also increased.

So the big question now is: What will happen to the gold price? A few days ago, the renowned World Gold Council (WGC), in essence a lobby organization of the gold mining industry, published a forecast for 2024 that you should definitely know as an investor.

Gold Price 2024: WGC outlines three scenarios In short: The experts see potential for the gold price to surprise positively even next year. The WGC cites several factors for this. These include uncertainties regarding the world economy and geopolitics, as well as the ongoing purchases by central banks. In terms of the world economy, the analysts draw three scenarios.

First: a „soft landing“. This scenario is assigned the highest probability by the WGC and, indeed, the market consensus (45 to 65%). In this case, the economy in the US would develop relatively solidly, which would have positive effects on the global economy.

In the past, such „soft landings“ usually had a negative effect on the gold price. According to the WGC, however, the current cycle should be evaluated differently. In 2024, geopolitical tensions could also be supported by the upcoming political elections in many major economies (e.g. USA in November 2024) in combination with the purchases by central banks, according to the experts. The gold price would move „flat with upside potential“, according to the WGC, in this first scenario.

Second: a „hard landing“. This describes a comprehensive recession in the US and other major economies. The probability of this, according to the WGC, is between 25 and 55%. The gold price would benefit most from this scenario. According to the WGC, it would be higher than in 2023 and even significantly above the record from 2020.

Third: „no landing“. WGC means this to be a re-acceleration of inflation and growth due to a significant recovery of the US industry and real wages. This scenario, however, is very unlikely (5 to 10%) and would result in the only one of the outlined possibilities in a „flat gold price with downward pressure“.

Be sure to pay attention to interest rate development In addition to the mentioned factors, the interest rate strategy of the US Federal Reserve is now decisive. The reason: If interest rates fall, gold is generally more attractive without interest. The timing and speed of the interest rate cuts are uncertain, stressed John Reade, who is Chief Market Strategist at the WGC. As long as the rates are falling, gold will be all right. According to Reade, the market is currently pricing in five interest rate cuts for 2024. This should support the gold price, according to the expert.

All in all, the WGC is thus optimistic. That is: Probably the gold price should remain stable in the coming year – that is, at the current high level. In the best case, the precious metal could even provide a positive surprise, although the risk of sustainable downward movements has not been completely eliminated, according to the experts.

I think, given the WGC’s forecasts, gold remains an interesting investment and a good addition to any portfolio.