Morgan Stanley expects gold prices to rise to $2,300 per ounce in 2024, but price trends remain volatile as uncertainty remains over U.S. economic data and whether the Federal Reserve will cut interest rates There is a high possibility that it will become.
However, if the 10-year real yield falls further, gold has room to rise from current levels. The yellow metal is still trending higher after the Fed’s first rate cut, but rising geopolitical and political risks in 2024 should also provide support. The World Gold Council said rising geopolitical risks tend to weigh on recycling volumes, according to the research firm.
Comex Gold’s positioning has rebounded to 190,000 lots, well below its peak of 300,000 lots, it said in a March 15 memo.
A surprise upside, especially in the US, could stall expectations for rate cuts and weigh on gold. Morgan Stanley said positioning could be overextended to the upside or higher prices could slow consumer purchases.
In recent years, gradual shifts in central bank purchases have seen gold prices rise again relative to real yields, more than offsetting exchange-traded fund (ETF) outflows, the paper said. There is.
The research firm said gold prices in 2012 were similar in real terms to today, driven by central bank buying and strong demand from China and India (before import tariffs).
The first two look set to do well again, but demand in India could improve with a strong economy. According to Morgan Stanley, gold was supported by negative real yields in 2012 as well, but not this time. “Our strategists see real yields continuing to decline, with a 1.55% 10-year decline, or about 50 basis points further down, by the fourth quarter, which could push gold prices further higher. ” he said.
After a flat year in 2023, jewelery demand, which accounts for 44% of total gold demand, is on an upward trend towards 2024. Gold and jewelry sales in China increased by 24% year-on-year due to strong sales in the Year of the Dragon.
In India, the Reserve Bank of India recently allowed gold to be imported without import duty for the first time, while the WGC also expects a recovery as consumers adjust to higher prices supported by strong economic growth in India. said.