World Gold Council Gold Outlook 2024: World Gold Council (WGC) has presented its 2024 outlook, unveiling critical insights for gold. The report said In a remarkable turn of events, gold shone throughout 2023, defying expectations amidst challenging market conditions. Looking ahead to 2024, the World Gold Council presents three potential scenarios for investors to consider.
While a ‘soft landing’ is anticipated, historical trends suggest it may not bode well for gold. Yet, geopolitical tensions, continued central bank buying, and the possibility of a global recession could provide unexpected support. The Council emphasizes the importance of gold as an effective hedge in uncertain times.
Despite facing challenges, the global economy showcased resilience in 2023, dispelling talks of an impending recession. Forecasts for 2024 lean towards a ‘soft landing,’ marked by positive but subpar growth. This scenario, while favorable, demands precise policy execution and relies on numerous external factors. Economic indicators, including expanding Composite PMIs and rising real earnings, contribute to an optimistic outlook. The potential for fiscal stimulus in 2024 further supports hopes of averting an economic contraction.
However, the specter of a recession looms, challenging the Federal Reserve’s historical success in achieving soft landings. Key determinants include shifts in the labor market, with previously resilient factors showing signs of vulnerability. Various indicators still suggest a moderate to significant chance of a recession, with an average probability of 45% over the next 12 months.
In a less likely third option, a ‘no landing’ scenario emerges, characterized by a reacceleration of inflation and growth. The rebound in US manufacturing and recovery in real wages could drive this outcome. The World Gold Council notes that lower nominal interest rates, resulting from policy rate cuts, may offer relief for gold investors, potentially translating into gains.
In summary, World Gold Council expected policy rate easing may hold complexities for gold investors beyond initial appearances. The World Gold Council advises a cautious approach, emphasizing gold’s role as a valuable asset amid the intricate landscape of 2024’s economic possibilities.