Gold Rush 2024: Prices Poised to Shine as Geopolitics, Rate Cuts Fuel Demand

   On December 4, international gold prices continued to soar, reaching a record high. According to the US Consumer News and Business Channel (CNBC), the spot gold price exceeded US$2,100 per ounce that day, and the global pursuit of gold seems to continue. Analysts say gold prices are likely to remain above $2,000 next year.
   What’s the reason behind higher gold prices? CNBC analysis: First, the Federal Reserve’s monetary policy. The market is betting that the Federal Reserve may start to cut interest rates in the first half of next year. Once interest rates drop, it will often weaken the status of the U.S. dollar, and gold is priced in U.S. dollars. A weaker U.S. dollar will make gold cheaper for international buyers, thereby boosting demand. . Secondly, the uncertainty of geopolitical conflicts in the Middle East in the past two months has also been good for gold, and there are many uncertainties next year, which may continue to support gold prices. In addition, global central banks purchased 800 tons of gold in the first three quarters of 2023, which is also a catalyst for higher gold prices. A recent survey by the World Gold Council also showed that 24% of central banks intend to continue to increase gold reserves in the next 12 months.
   CNBC said that gold tends to perform well when the economic outlook and geopolitics are full of uncertainty. Currently, the price of gold has risen for two consecutive months, with the Palestinian-Israeli conflict boosting market demand for this safe-haven asset. BMI, a research institution affiliated with Fitch, said in a recent report: “The main factors boosting gold prices in 2024 will be the Federal Reserve’s interest rate cuts, the weakening of the U.S. dollar and the intensification of geopolitical tensions.”

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