Gold will soar to $2,200 in 2024, silver will go into space - UBS

UBS predicts that gold and silver prices will continue to increase in 2024 due to the anticipated interest rate cuts by the Federal Reserve.

As interest rates decrease, gold becomes a more appealing option in comparison to other investments like bonds.

The LBMA believes that there is a possibility for gold to reach a new all-time high in the current year.

According to UBS, gold and silver prices are predicted to increase in 2024 due to the anticipated interest rate cuts by the US Federal Reserve. Additionally, the value of the dollar is expected to decline, as stated by gold.

Moreover, the demand for gold as a secure investment has risen following the start of the conflict between Israel and Hamas in October.

According to Joni Teves, the precious metals strategist at the bank, the cost of the yellow valuable substance is expected to reach $2,200 per ounce by the conclusion of the year.

Despite the uncertainty surrounding the timing and magnitude of rate reductions, UBS maintains its belief that the Federal Reserve will initiate measures to loosen monetary policy in the current year.

The previous week, the Federal Reserve declared that it would not be changing interest rates and also disappointed expectations of a decrease in rates for March.

According to Joni Teves, the future looks bright for silver. This is because when the Fed lowers interest rates, silver typically performs better than gold.

She believes that silver is currently not performing as well as gold, but it has the potential to increase significantly once the Fed starts to loosen its monetary policies.

Silver's performance is typically tied to the economy as it is widely utilized in various industries. This valuable material is commonly used in the manufacturing of automobiles, solar panels, accessories, and electronic devices.

According to the Silver Institute, the worldwide demand for silver is expected to reach 1.2 billion ounces by 2024. This would mark the second-highest demand level in history.

The primary driving force behind the growth of global silver demand is the rising demand from industries. According to projections, the silver market is expected to continue experiencing a deficit in 2024, marking the fourth consecutive year of structural deficits.

The LBMA predicts that gold may reach a new peak this year, even though its growth has decreased since reaching its highest point in late 2020.

In 2024, the average cost of gold is expected to be $2,059 per ounce, representing a 6.1% increase from the previous year's average of $1,940.5 in 2023. The LBMA predicts that the average price of silver for this year will be $24.80, a 6.2% rise from the 2023 average of $23.35.

According to the annual report of the WGC, the worldwide demand for gold in the previous year was 4,448 tonnes, which was a 5% decrease from 2022. Central banks purchased 1,037 tonnes of gold, indicating a sustained demand similar to previous years, but falling short of the record set in 2022 (1,082 tonnes). For the third consecutive year, global gold ETFs experienced outflows, losing 244 tonnes.

In contrast, there was a 27% rise in the demand for gold in China, reaching 287.2 tons, and a significant 88% increase in Turkey, totaling 159.6 tons. The US also saw a 5% increase in demand for gold coins and bars, reaching 112.8 tons.