By Dr. Renisha Chainani, Head- Research, Augmont – Gold for all
After spectacular performance in 2022 and 2023, Gold is again going to shine in 2024, due to below reasons:
- Interest rates are expected to fall – lowering the potential cost of owning gold. With rate reduction on the horizon in the developed world in 2024, a tailwind for higher precious metal prices is on the horizon.
- A possible recession and a sinking Dollar Index – Even though the world had moderate growth in 2023, threats exist, with economic output expected to stagnate. This is usually unfavourable for the currency, which might boost gold prices for domestic investors.
- Central banks will continue to buy – Over the last fifteen years, Central banks have purchased over 5,000 tonnes of gold. This year, they will most likely add another 500 tonnes or more.
- Inflation is still a problem – Inflation is no longer nearing 10% per year, as it was about 18 months ago. However, it remains much above levels that consumers and households can tolerate. Investors looking for a hedge may resort to gold, as they did in the past.
- Geopolitical risks – Finally, the geopolitical situation is still bleak. Any rise in hostilities in any of the world’s geopolitical hotspots could spark a safe haven bid.
- ETF holders will re-enter the market – In the last three years, gold ETF investors have avoided it. This market segment moves in cycles. The next leg of that cycle will most likely see investors increasing their gold ETF holdings. History suggests that is correct.
- Speculators looking to expand their positions – Speculative investors have mostly abandoned gold in recent years. There are indications that they will soon return to the long side of the market, boosting upward price pressure.
- Expensive equities markets – Gold is a terrific diversifier, having historically been the best-performing single asset class when equity markets decline. Given market prices, excess froth (or greed) in the markets, and the bleak economic outlook, a significant market drop would not be surprising. If this occurs, gold will most likely benefit.
The best way to start or stay invested in gold and silver is through Augmont Digital Gold for better returns. Those who have missed this 2023 rally, can still take advantage as Gold and Silver prices are expected to rise 10% and 20% respectively in 2024.
Disclaimer: This report contains the opinion of the author, which is not to be construed as investment advice. The author, Directors, and other employees of Augmont Enterprise Private Ltd. and its affiliates cannot be held responsible for the accuracy of the information presented herein or for the results of the positions taken based on the opinions expressed above. The opinions mentioned above are based on information, which is believed to be accurate, and no assurance can be given for the accuracy of the information. The author, directors other employees and any affiliates of Augmont Enterprise Private Ltd cannot be held responsible for any losses in trading. In no event should the content of this research report be construed as an express or implied promise, guarantee or implication by or from Augmont Enterprise Private Ltd. that the reader or client will profit or the losses can or will be limited in any manner whatsoever. Past results are no indications of future performance. Information provided in this report is intended solely for informative purposes and is obtained from sources believed to be reliable. The information contained in this report is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. We do not offer any sort of portfolio advisory, portfolio management or investment advisory services. The reports are only for information purposes and are not to be construed as investment advice