Gold Outlook for 2024

Federal Reserve

The Federal Reserve will be front and center when it comes to the gold markets this upcoming year. The gold markets will continue to see a lot of volatility, but I think at this point in time, the Federal Reserve’s suggestion that it is going to cut interest rates during the year will continue to put upward pressure on the gold market. That being said, it does not necessarily mean the gold will go straight up in the air but it’s obvious that the bond market will have a huge part to play in this market. After all, the markets will continue to take their cues off of whether or not you get paid to hold bonds. That is a market that will continue to see lower yields for 2024, and therefore it does make more sense to hold gold.

Economic and Geopolitical Risks

There are a lot of concerns out there about the global economy as well, so it does make a certain amount of sense that the gold market may have a bid. After all, if we are going to see economies around the world slow down, you should see the previously mentioned bond yields drop rather significantly, and that of course makes gold more attractive as it does not pay a yield, but it does protect wealth.

Furthermore, there is obviously the conflict in the Middle East that could expand. Beyond that, there is no shortage of conflict around the world in places such as Ukraine, which of course has disappeared from the headlines from the latest mainstream media but is still very much something that people will be concerned about. Gold is a way to protect your wealth in that scenario as well.

Technical Analysis

The technical analysis for this market is obviously very bullish. The 50-Week EMA is at the $1940 level and is rising. The $2000 level of course is going to be an area that attracts a lot of attention, and at this point in time it looks like any pullback toward that area is probably going to attract attention, but the 50-Week EMA will as well, and quite frankly the blowout candlestick that we had seen toward the end of the year in 2023 suggest that there is a bit of an air pocket above, and it may stabilize the market for the short term, but longer term I suspect that gold will have an environment where traders will continue to come in and pick up each dip that appears.

The 200-Week EMA would have to be broken to the downside for my attitude to change, which is all the way down at the $1800 level. It’s not that it can’t happen, it’s just that it would take an extraordinarily negative move. When you look at the year 2023, you can see that the $1800 level was defended quite stringently, and I see nothing on this chart that would suggest it would not see the same type of action. Worst case scenario, we bounce around between here and there, but I still believe that the buyers have the upper hand going into 2024, especially as the Federal Reserve will not be the only central bank to start cutting rates. Ultimately, this will help a lot of risk assets, but it also dries up the value of gold as it can preserve wealth. It’s probably not something you’ll be throwing all of your portfolio into, but a reasonable percentage of it certainly belongs here.