UBS analysts predict a further increase in gold and silver prices in 2024 on expectations that the US Federal Reserve will move to lower interest rates.
“We expect the Fed’s policy easing to drive gold higher,” said precious metals analyst Johnny Teves, adding that a weaker dollar would also contribute to this.
He predicts that the price of gold will reach $2200 per ounce by the end of this year, CNBC reports.
As interest rates fall, gold becomes more attractive compared to alternative investments such as bonds. At the same time, lower rates weaken the dollar, making gold cheaper for international buyers, which leads to an increase in demand.
Despite the fact that there is still a lot of uncertainty about the timing and extent of rate cuts, UBS still expects the Federal Reserve to move to ease monetary policy.
The attractiveness of gold as a safe haven increased amid the deteriorating geopolitical situation in the Middle East last October. In January, prices reached a record $2100 per ounce.
“We think that investors will invest in gold in the face of great macroeconomic uncertainty and geopolitical risks,” Tevez said. The prospects for silver, the “poorer cousin,” are also optimistic, and it is likely to “really shine,” he said.
“We think that silver can succeed in the scenario of easing the QE,” the expert said. According to him, the rate of rise in the value of silver may outpace the growth of gold.
According to the Silver Institute, global demand for silver will increase by 1% in 2024 and reach 1.2 billion ounces. If the expectations are met, this will be the second highest figure in history.
“Increased industrial demand is the main catalyst for the growth of global demand for the metal,” the industry association said in a statement.
Global silver supplies are expected to grow by 3% to 1.02 billion ounces, which could be the highest in eight years.
Quotes of gold futures contracts during trading on Friday are down 0.5% to $2021.6 per ounce. Silver is up 0.5% to $22.67 per ounce.
