Skip to content

Can gold dominate in 2024? Here’s what macroeconomics guru says

What would happen if we returned to the gold standard?
Vinicius Barbosa

Gold’s potential to outperform base metals in 2024 is gaining traction, according to Mike McGlone, Bloomberg Intelligence‘s Senior Commodity Strategist.

Essentially, the precious metal is showing strength, possibly strengthening its dominance in the coming year amidst feared economic downturns.

On December 15, McGlone posted on X (formerly Twitter) about the shifting dynamics between industrial metals and gold. Notably, he highlighted that weakening base metals contrasted with strengthening gold last year. This divergence could accelerate if “Federal Reserve policies serve as a reliable indicator,” suggested the Commodity Strategist.

Historically, the ratio of the Bloomberg Industrial Metals Spot Subindex to gold expands with monetary tightening. Conversely, it declines when policies ease. McGlone’s observations draw from this pattern observed since 1991.

Gold to $3,000 per ounce in 2024 and economic domination

In particular, the shared analysis illustrates the current state of the metals market. The ratio of base metals to gold is notably low, barely above the 2020 low point. Despite the Fed hinting at interest rate reductions in March, guidance suggests central bank efforts to stimulate the economy may experience further delays.

Base Metals often Fall vs. Gold When the Fed Eases. Source: Bloomberg Intelligence

A potential global recession looms, with central banks possibly relaxing policies as a remedy. Yet, the efficacy of such actions is uncertain and could come with significant lags. Mike McGlone has consistently warned about that, mentioning Bitcoin (BTC) as a leading indicator.

Interestingly, the Senior Commodity Strategist predicts Gold will reach $3,000 per ounce in 2024 while being bearish about Bitcoin and stocks.

All things considered, McGlone leans towards a cautious interpretation. Despite a resilient US fiscal environment, he posits that the relative underperformance of industrials against gold indicates broader economic challenges. Gold may be poised to shine amid uncertainty, with its ascent suggesting a safe-haven appeal that could eclipse industrial metals in 2024.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Read Next:

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account? Sign In

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.