Gold price is forecast to skyrocket to 90 million in 2024, why?

Shocking forecast for the US, gold may increase sharply

In 2024, world gold prices may increase sharply because the US is forecast to pump a lot of money into the economy and the demand for gold from central banks of many countries is expected to be high in the context of an uncertain world.

On Kitco, Preston Pysh, co-founder of Investors Podcast Network - one of the world's leading podcast channels on finance and personal finance management - has just issued a rather surprising warning about US monetary policy moves and world gold prices.

Accordingly, Preston Pysh warned that the US Federal Reserve (Fed) in 2024 could surprise with massive money printing, a common occurrence in a US election year.

Pysh predicts the Fed will make significant rate cuts, possibly starting in early 2024.

According to this expert, 2024 is an election year in the US. Therefore, there will be unpredictable fluctuations. Usually, a much larger amount of money will be pumped out compared to a year without a presidential election.

In fact, how much money is pumped out depends largely on the health of the economy and the inflation situation. At this point, just over a month into the new year 2024, Wall Street experts have very contrasting assessments about the possibility of a US recession and how the Fed will respond to this issue.

UBS and Morgan Stanley predict that the US economy will fall into recession in 2024 and the Fed will cut interest rates in the first half of the new year.

UBS does not rule out the possibility of the Fed cutting interest rates as early as March. In total, the Fed will cut by 275 basis points in 2024. This means that the Federal Funds Rate (FFR) will drop from a 22-year high of 5.25%-5.5% currently to 2.5%-2.75% by the end of next year.

Although this forecast is surprising because the US economy is still sending out positive signals, it is also reasonable when the Fed's interest rate hike cycle is about to end. After 11 interest rate hikes in the past year and a half, a new cycle of the Fed easing monetary policy is inevitable.

According to Pysh, the US economic recession signal was there since the banking crisis in March. However, the Fed intervened promptly with the Bank Term Financing Program (BTFP) to improve liquidity in the US banking system.

Gold prices will hit new highs in 2024

Gold is also forecast to have a positive outlook in 2024 as many countries are still racing to accumulate more gold when the world is unstable and want to reduce dependence and reduce the role of the USD.

Demand for gold is expected to be high in the coming months as several Asian countries, including China and India, enter their peak gold consumption season of the year.

In a latest report, according to the World Gold Council (WGC), China is in a period of widespread gold buying, increasing its gold reserves over the past 12 months.

Many forecasts say that gold is entering an uptrend market with prices possibly exceeding $2,100/ounce this year and will continue to rise in 2024, possibly even reaching $3,000/ounce (about VND90 million/tael).

The price of gold on the world market at the beginning of the trading session on November 22 in the US exceeded the threshold of 2,000 USD/ounce, thereby pushing the price of gold bars in Vietnam to over 72 million VND/tael (selling price), an increase of about 5 million VND/tael compared to the beginning of the year. Gold rings set a record high, fluctuating from 61.1-61.4 million VND/tael (selling price), an increase of 7 million VND/tael compared to the beginning of the year.

World gold increased sharply in the context of the continuous decline of the USD following the two decisions to stop raising interest rates after two meetings of the Fed and the less hawkish signals of the US central bank.

The cooling US dollar has helped push gold prices up.

The DXY index - measuring the greenback's volatility against a basket of six major currencies - fell from 106.8 points on October 26 to 103.7 points as of November 22 in the US market (night of November 22, Vietnam time).