WGC – Gold Outlook, 2024

In 2023, gold had a successful year despite expectations of a high interest rate environment. It performed better than commodities, bonds, and most stock markets. Looking ahead to 2024, there are three possible scenarios: a 'soft landing' in the US, which is the market consensus and could have a positive effect on the global economy; heightened geopolitical tensions in major economies due to key elections; and continued central bank buying. In the past, soft landing environments have not been favorable for gold, leading to flat or slightly negative returns. However, this cycle may be different. The combination of geopolitical tensions and central bank buying could provide additional support for gold. Additionally, it is not certain that the Federal Reserve will successfully steer the US economy to a safe landing with interest rates above five percent. There is also the possibility of a global recession. These factors may encourage investors to include gold in their portfolios as an effective hedge.