https://www.miningweekly.com
Environment|Gold|Risk Management
Environment|Gold|Risk Management
environment|gold|risk-management

Geopolitical tensions, continued central bank buying likely to support gold in 2024

Gold bars

Photo by Bloomberg

7th December 2023

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

Font size: - +

Gold had a strong 2023, defying expectations amid a high interest rate environment and outperforming commodities, bonds and most stock markets, the World Gold Council (WGC) says as it outlines possible scenarios for the gold market in 2024.

In its ‘2024 Outlook on Gold’ report, published on December 7, the council states that market consensus is for a “soft landing” in the US, which should positively affect the global economy.

“Historically, soft landing environments have not been particularly attractive for gold, resulting in flat to slightly negative average returns.

“That said, every cycle is different. This time around, heightened geopolitical tensions in a key election year for many major economies, combined with continued central bank buying could provide additional support for gold,” it notes.

Geopolitics added between 3% and 6% to gold’s performance in the last year, the WGC points out.

In 2024, factors like Israel’s war in Gaza, and major elections taking place globally, including in the US, the European Union, India and Taiwan, mean investors’ need for portfolio hedges is likely to be higher than normal.

Central banks have also been a significant source of demand for the gold market. Central bank buying is likely to reach a record year after breaking a year-to-date record in the third quarter.

The council expects this trend to continue into 2024.

Further, it says, the likelihood of the US Federal Reserve steering the US economy to a safe landing with interest rates above 5% is by no means certain, while a global recession is still on the cards.

“From a risk-management perspective, this would provide strong support to the case of maintaining a strategic allocation to gold in the portfolio,” the WGC states.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Immersive Technologies
Immersive Technologies

Immersive Technologies is the world's largest, proven and tested supplier of simulator training solutions to the global resources industry.

VISIT SHOWROOM 
Willard
Willard

Rooted in the hearts of South Africans, combining technology and a quest for perfection to bring you a battery of peerless standing. Willard...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine video image
Magazine round up | 01 March 2024
1st March 2024
Implats CEO Nico Muller
Implats expecting phased reduction in group output
29th February 2024 By: Martin Creamer

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.175 0.211s - 133pq - 2rq
Subscribe Now