Analysts anticipate gold rising to a record $2,500 per troy ounce in the coming years, driven by lower interest rates and recession risks.
Thus, David Neuhauser, founder of US hedge fund Livermore Partners, sees the yellow metal breaking out and reaching new highs by the end of 2024. "Much of this has to do with the fact that recessionary forces may take hold beginning later this year and gain steam in 2024," Neuhauser said.
Notably, on August 7, 2020, gold prices hit an all-time high, soaring to $2,072.50 per ounce. At present, however, the precious metal cannot boast such achievements. On August 10, gold futures for June delivery on the COMEX exchange traded at $1,914.4 per ounce. If Neuhauser’s prediction comes true, the asset will advance by 30.6%.
This bullish outlook comes from investor confidence in gold as a safe-haven asset that protects their capital in times when inflation revs up. The head of Livermore Partners expects stagflation to persist in the global economy for the next few years, with inflation ranging from 3% to 5%.
"I’m pretty confident that within a couple of years, we will see $2,500 gold," Wheaton Precious Metals CEO Randy Smallwood shared a similar view. Estimates show that any scenario suggesting an economic downturn will back up the precious metal.
Currency strategists at Singapore-based lender UOB also expect gold to push beyond the record. They believe that the yellow metal could skyrocket in the second half of 2024. "Key driver in our positive outlook for gold is anticipated peak in Fed rate hiking cycle as well as upcoming topping out of US Dollar strength," Heng Koon How, UOB's head of markets strategy, global economics, and markets research, said.
According to Heng, the yellow metal could rise to $2,100 per ounce by the second quarter of 2024. Demand for gold is likely to improve amid lower interest rates and a decline in the US currency. A weaker dollar will make the metal cheaper for holders of other currencies. With interest rate cuts by the Federal Reserve, gold will become more appealing on the back of falling bond yields, the analyst added.
