CHENNAI: Gold price outlook for 2024 hinges on whether the US economy is pulling a soft landing, easing the global macroeconomic situation and the possibility of a simmering conflict in the Middle East emerging as a wider conflict.
“While the Fed steering the US economy to a safe landing is a possibility, it is a rarity and a global recession is still on the cards. This should encourage many investors to hold gold as a hedge in their portfolio,” according to the World Gold Council Report.
A soft-landing environment is not attractive for gold, resulting in flat to slightly negative growth as gold is considered a hedge against economic uncertainties. Gold spot prices rose after October 6 from $1,819 per ounce and currently stands at $2062 an ounce as on December 30, 2023. It stood at $1,813.8 on December 29, 2022.
On the domestic front, 22 carat gold prices in Bengaluru are at Rs 58,550, Rs 59,100 in Chennai, Rs 58,700 in Delhi. Economic expansion, risk and uncertainty are positive factors for gold prices.
“All in all, gold can be a useful asset to hold in 2024. As interest rates peak and timing and extent of rate cuts remain uncertain, it can provide an opportunity for markets to speculate, creating volatility across asset markets, including gold,” says Chirag Mehta, Chief Investment Officer, Quantum AMC.
According to Mehta, markets can oscillate between optimism and pessimism creating wild short-lived swings in gold prices on either side. So, he suggests investors to use these swings wisely to build your allocation to gold.