Gold price could blast off in 2024

NEW YORK (January 2) Gold price had a relatively good performance in 2023 even as its performance lagged that of key assets like the Dow Jones, Nasdaq 100, and S&P 500 indices. Gold jumped by about 12.6% during the year and reached its all-time high of $2,145. 

Gold price could do well in 2024

I have a feeling that the gold price will continue doing well in 2024 for three reasons. First, geopolitical risks are still rising. On Tuesday, Iran sent its warships to the Red Sea as the crisis in the region continued. This decision risks leading to a full-blown war involving American vessels. Gold is often seen as a good hedge against these risks.

Second, America’s public debt is expected to continue rising in the coming months. Data shows that the country’s public debt has jumped to over $33.9 trillion, a few months after it crossed the $33 trillion level. This means that the country’s debt burden will end the year at almost $35 trillion. 

Third, the Federal Reserve has pointed to rate cuts in 2024. This is a major change since the bank was hiking rates in the past two years. It has pushed them to a two-decade high in a bid to fight inflation. Gold tends to do well when the Fed is cutting rates.

Finally, technicals are supportive of gold price upside. On the weekly chart, we see that gold is stuck at an important level, where it failed to move above since August 2020. This means that it has formed a triple-top pattern, a bearish sign. 

However, it has also formed an inverted head and shoulders pattern, whose neckline is at $2,080. Therefore, a move above the all-time high of $2,145 will be a bullish sign. It will invalidate the triple-top pattern and move much higher.

Invezz