Why Gold Could Trade at $2,400 Next Year

Analysts are offering bulling predictions of gold bullion prices hitting up to $2,400 per ounce next year thanks to a confluence of market, geopolitical and economic factors. Kedia Advisory director Ajay Kedia says that gold prices are experiencing significantly higher volatility but notes that the metal has provided strong returns in the past several months.

Kedia Advisory remains bullish on the precious metal and expects gold prices to reach around $2,240 per ounce if price volatility does not reduce and up to $2,400 in 2024 if the “fundamentals remain strong.” The Kedia Advisory report notes that gold reaching highs of $2,400 next year will depend on an interplay of market, economic and geopolitical dynamics, which paint the precious metal as a resilient and in-demand asset that can help to stabilize portfolios against global uncertainties.

According to the company, a possible interest cut, inflation, central bank buying, dedollarization and ETF/festive demand will determine if gold prices reach the $2,400 mark next year.

Lower interest rates are intrinsically linked to higher gold prices. Although consecutive benchmark interest rate hikes by the U.S. Federal Reserve have significantly dampened gold prices over the past few years, the possibility of an interest rate cut could support gold prices.

Reuters recently reported that Fed officials flagged the possibility of an interest rate cut in the coming months, which could in turn lower the opportunity cost of holding gold bullion and encourage investment in the precious metal.

High inflation may also provide additional support for gold prices, Kedia Advisory says, as rising inflation has traditionally increased the demand for gold as investors look for safe-haven assets. However, the complex relationship between U.S. inflation, benchmark interest rates and gold prices makes it difficult to project the movement of gold prices based on inflation alone.

Central bank buying could also bolster gold prices in 2024. Central banks were responsible for the largest-ever gold buying spree last year and are reported to have purchased a net 800 tons of gold year-to-date. A similar purchase spree by central banks could prop up gold prices in 2024 and even help them reach the $2,400 mark.

Dedollarization, or the process of decoupling from the dollar as a reserve currency and the main mode of international trade, has been gaining steam among several countries. The result is significantly increased gold purchases for countries looking for a store of value other than the dollar as a hedge against currency risk and inflation.

As countries such as Russia, Turkey, India and China divest from the greenback and invest in gold in a bid to increase their financial independence, we can expect their actions to support gold prices in the near to mid future.

Exploration companies such as Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) could see these ongoing developments in the price of gold as further validation for them to ramp up their activities so that they can benefit from the coming spike in precious metals prices.

NOTE TO INVESTORS: The latest news and updates relating to Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are available in the company’s newsroom at https://ibn.fm/AZMCF

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