Gold News

2024 Gold Forecasts 'Bullish' from New Dollar Record But GLD ETF Investment Flows Negative

GOLD PRICES held onto another strong weekly gain in London trade Friday as betting continued to grow that the US Federal Reserve is done raising Dollar interest rates, with its next move being a cut by May 2024.
Gold priced in the US Dollar finished November with a new month-end record at $2035 per Troy ounce, and the precious metal set a fresh record monthly average in Euro terms at €1835.
Sterling's rally on the FX markets in contrast saw the UK gold price in Pounds per ounce slip 2.0% from end-October's new all-time high and average £10 less than April's record of £1606.
Chart of month-end gold price in USD, GBP, EUR. Source: BullionVault
"I'm bullish on gold in 2024 for several reasons," says Eric Sterner, chief investment officer at $3.4bn US advisory Apollon Wealth, "including stubborn inflation, geopolitical tensions and conflicts, and the Fed near, or potentially at the end, of its hiking schedule." 
"Gold prices are expected to increase in 2024," says international finance agency the World Bank in its latest Commodity Outlook.
"An escalation of the conflict in the Middle East could result in sharply higher prices due to increased demand for safe-haven assets."
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"Investments flows into gold and thus prices will rise as global growth slows," agrees research agency BMI, a division of ratings agency Fitch Solutions, pointing also to a weaker US Dollar led by the Federal Reserve cutting interest rates.
But the current high prices is seeing profit-taking by existing gold investors, creating net negative flows overall, with BullionVault users liquidating another 0.4% of their proven vaulted gold holdings across November, while the giant GLD gold-backed ETF trust fund shrank again on Thursday, retreating to its smallest size in 2 weeks with an outflow of 0.7% this week alone.
Silver's giant SLV ETF also continues to shrink as investors take profit, down 0.4% on Thursday to its smallest since May 2020.
Silver jumped 7.8% in Dollar terms across November, its strongest rise since July to make its first monthly finish above $25 per Troy since July 2021.
November's jump in precious metals prices is hurting consumer demand in the key market of India, with dealers having to offer $9 per ounce discounts to the official import price this week according to Reuters, deeper by $3 from last week.
Despite the current Hindu wedding season, "Buyers are grappling with the sudden surge in prices," the news-wire quotes one Mumbai dealer.
"They are waiting to see whether prices will sustain at these levels."
Premiums for gold landed in Shanghai versus London meantime slipped to $26 per ounce on Friday, the lowest since start-August, when a surge in household demand – led by weak real estate, falling stock markets and low interest rates on bank savings – met import restrictions from the central bank in China, the precious metal's No.1 consumer nation.
Friday morning saw a fresh record platinum discount to gold, trading $1110 per ounce lower than the 'safe haven' metal as the white precious metal – primarily used in diesel engine autocatalysts to reduce harmful emission – traded little changed from last weekend at $930.
Sister metal palladium – which finds almost 90% of its demand from gasoline-engine autocats – meantime dropped back through $1000 per Troy ounce, a 5-year low when reached in the middle of November.

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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