The price of Gold seems to be enjoying the pricing in of expected rate cuts from the Fed next year.
As of Dec. 27, Gold price has climbed almost a full percent — nearing the $2,100 range.
Let’s breakdown a few factors to see if the Gold price can keep going up.
$DXY sends Stocks, Gold higher
WOW $DXY looking to send stocks to ATH, watch gold for potential retest of 2150 pic.twitter.com/7Jv3vkbToM
— Tom Crown (@TomCrownCrypto) December 27, 2023
The U.S Dollar index ($DXY) continues to decline, nearing yearly lows of $99.91 — last seen in July of ’23.
What does this mean for Gold and Stocks?
Well, it’s clear that investors are searching for alternatives to holding USD, which could be a wise alternative given the persistent inflation experienced.
We wouldn’t be surprised to see a slight bounce higher here for $DXY — followed by a further drop.
Six rate cuts by the Fed are expected
Another pertinent factor to consider when making a Gold price forecast is what the markets are pricing in.
As it stands now, World Interest Rate Probabilities (WIRP) is pricing in 15% odds of the first cut coming on Jan. 31.
This seems quite low, so let’s take a look at what they forecast for the year.
As it stands now, six rate cuts are fully priced in for 2024.
The Fed is predicting three rate cuts by year end 2024, while markets are predicting six to seven.
Who are you siding with? pic.twitter.com/XhH37hF6tk
— Bespoke (@bespokeinvest) December 21, 2023
This data is hard to fully account on with many external factors.
Perhaps this biggest factor being the tensions brewing between in the Middle East.
It’s hard to predict what will happen and if tensions will continue to happen.
In the meantime, we’ll be watching for more concrete data in the initial jobless claims report on Thursday.
Summary
We can agree that there are some popular catalysts for Gold to move higher in 2024.
However, we need to temper expectations and are sticking with our convictions for Gold hitting $2,200 in 2024.
There are others, who are far more bullish on their Gold price forecasts.
Like, Gold perma-bull Peter Schiff.
$GLD, the first and most popular #gold ETF, just hit a new all-time record high. This is likely the first of many record highs that will be set in the days, weeks, months, and years ahead. There is no ceiling to the price of gold, as there’s no floor to value of the U.S. #dollar.
— Peter Schiff (@PeterSchiff) December 27, 2023
While his claim that ‘there is no ceiling for Gold’ is bold, it adds to the compelling bull case for 2024.
It’s worth noting however, that Schiff despises Cryptocurrencies, something we are bullish on.
