In the midst of escalating geopolitical tensions in the Middle East and mounting fears of a recession in European economies, spot gold prices have surged impressively in the past month.
Gold’s value has climbed more than 10%, starting at $1,815 in early October and now around $2,000 per ounce, marking its highest level since May 2023.
What’s even more intriguing is the possibility that this remarkable rally is far from over. According to senior Bloomberg commodity strategist Mike McGlone, the precious metal may have the potential to ascend to as high as $3,000 in 2024.
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McGlone’s comments
On October 30, McGlone released a post titled “Copper $3, Gold Toward $3,000: US Recession Could Be 2024 Path.”
Notably, the commodity guru explained how the precious metal reached the highest-ever average annual price of $1,930 per ounce in the period from January 1 to October 27, 2023, in spite of a tough macroeconomic environment marked by robust dollar, resurgence in stocks, and high rates.
This strength in gold against such an adverse backdrop “may portend a firming foundation for the metal.”
Additionally, the bullion could receive a further boost if predictions that the US will fall into a recession at the end of 2023 come to fruition.
“Declining copper and industrial metals appear consistent with deteriorating global growth and Bloomberg Economics’ outlook for a US recession to start at about year-end.”
– wrote McGlone.
Stock market outlook
Meanwhile, things do not look as good for the risk assets, particularly stocks.
US equities witnessed a major sell-off in the past two weeks, triggered by rising Treasury yields and geopolitical turmoil.
According to analyst and investor Puru Saxena, the S&P 500, which lost about 6% from its recent peaks, could witness more pressure before staging “a relief rally” in the final weeks of 2023.
Nevertheless, this resurgence is anticipated to be short-lived. Saxena predicts that the prevailing bear market will persist until 2024 when the market is projected to reach its low point sometime during that year.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
