Will gold prices increase in 2024? Here's what the experts think
Gold investing has garnered a lot of attention in the last year or so. Gold prices soared, hitting their highest point in over a year, and discount retailer Costco even started selling gold bars online.
It's no wonder either: Gold has long been known as a smart hedge against inflation — and with inflation well above the Federal Reserve's 2% goal, many consumers have sought out its protection. Gold is also a portfolio diversifier and, generally speaking, a good store of value in the long run.
Despite all this, though, gold prices do fluctuate in the short term. In September, for example, the average price dipped below $1,850 per ounce. By the end of November, prices jumped over $2,000. Will prices top that in 2024? Here's what experts have to say.
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Will gold prices increase in 2024? Here's what the experts think
So, where are gold prices headed next year? Here's where the experts think gold prices will land in 2024.
The economy will call for some safe bets
One of the big reasons gold has become popular lately — and pricier — is stubborn inflation. And while the Fed has hiked interest rates many times to help quell it, the central bank is still far from its 2% goal. And according to a forecast from WisdomTree Investments, it will stay that way for a while.
WisdomTree's forecast currently projects a 3.1% inflation rate at the start of 2024 and a 2.60% rate by the third quarter. This persistently high inflation could push up demand for gold and, subsequently, gold prices.
"When inflation rates rise, gold prices often increase as well," says Liam Hunt, a financial writer and analyst for Gold IRA Guide. "If current trends of economic uncertainty and inflationary pressures continue, there could be upward pressure on gold prices. In 1980, gold prices reached a then-record $800 per ounce following years of generationally-high inflation over the preceding decade."
Forecasts aren't always right, though. And while WisdomTree currently predicts gold prices to hit a new all-time high next year, if economic conditions worsen, demand for gold could rise considerably, sending prices up even more.
As Nitesh Shah, head of commodities and macroeconomic research at WisdomTree, explains, "In other scenarios of the world where economic conditions deteriorate faster and there is greater demand for defensive assets, we could see gold prices rising even further."
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Geopolitical tensions and the election could drive up demand for gold
Inflation is an important factor to watch next year if you're tracking gold prices. Geopolitics are another.
"Periodically, geopolitical risks, and a flight to safety drive up the demand for gold," Shah says. "Recently, the Israel-Hamas conflict has driven up the geopolitical premium in gold."
He's right: After the conflict between Israel and Gaza began in early October, gold prices soared, reaching points not seen since mid-2022.
"Fears that an uncontained, regional war could disrupt global markets and supply chains triggered capital flight into gold and away from speculative assets such as high-risk stocks," Hunt says. "Gold is often seen as a safe-haven asset. In times of economic uncertainty or market volatility, investors tend to turn to gold, putting upward price pressure on the yellow metal."
Another time investors might flock to a safe-haven investment like gold? That'd be during a presidential election, when some might view a change in leadership as a risk to their finances.
"Given the U.S. presidential election in 2024, we expect retail demand for gold to remain high as investors turn to the metal to hedge against what they feel is a risk of an adverse outcome," Shah says.
Gold prices will increase
Given economic conditions and political tensions, most experts agree that gold prices are going to rise in 2024, as more and more consumers seek out a safe spot to store their wealth.
"Gold is the best hedge there is and every portfolio," says Collin Plume, founder of Noble Gold Investments. "We have an average of an economic downturn every 5.5 years. Each time a downturn happens, you need that one asset that will keep you buoyant while you wait for the rest of your portfolio to recover."
According to WisdomTree's forecast, gold prices will climb throughout 2024, eventually reaching $2,090 per ounce by the third quarter. In its "bull" forecast, the firm projects prices could get as high as $2,300 per ounce.
The bottom line
There's no way to tell for certain, but signs seem to point to a rise in gold prices in the coming year. If you're considering investing in gold, that means you may want to act quickly, before prices can rise further. This will also allow you to realize returns on your investment — at least in the short term.
