It looks like 2024 is shaping up to be a landmark year for gold. And if we look at the combination of geopolitical, economic, monetary and technical factors – we could see a major gold rally this year.
Let’s look at why I’m expecting a gold rush in 2024.
The interest rate cuts will drive a gold rally
One main driver of the gold rally, is what is happening in the US. They are anticipating a few interest rate cuts by the US Federal Reserve and other central banks.
Now what’s important to note is this. Historically, lower interest rates have boosted gold prices. In 2023, gold prices reached a high of $2,135 per ounce.And this was driven by a weak U.S. dollar and the prospect of rate cuts.
If we look at J.P Morgan, they have also agreed with the upside in the gold price to come.
In fact, they anticipate gold prices will peak at $2,300.
Here’s what Natasha Kaneva, Head of Global Commodities Strategy at J.P. Morgan had to say: “Gold and silver are our only structural bullish calls for the second consecutive year.”
This prediction is based on the Fed cutting up to 125 basis points over the second half of 2024.
If this takes place, we will see gold push to new all-time highs!
Next, we have to address the big issue at the moment.
Geo-politcal tensions are pushing up gold’s safe-haven demand
It’s terrible what is happening in the world right now with so many countries at war.
• Russia versus Ukraine.
• Iasel-Hamas conflict
• US-China tensions
• Armenia-Azerbaijan conflict
And now with the UK getting involved, concern is growing that things will escalate.
The consequence of this fear is investors are more likely to invest in gold as a safe-haven asset.
This is because of two reasons.
First, they will be able to keep their money in a reliable store of value.
Second, there is a low correlation with other assets. So, it can act as insurance if other markets fall as a result of geopolitical stress.
With this potential increase in we will see a higher gold price.
And the charts agree.
You’re looking at the weekly chart of gold.
There are two main elements I want to start off with.
First, we can see, there has been a strong trend up since October 2022.
The black line that is plotted is the 200MA. When price is above it, the market is in an uptrend.
And the price has been riding above the 200MA. That tells us gold is in a bull market.
Second, let’s look at the shaded area.
You can see in 2023, the price hardly moved.
It started in $1,942 in January up to $2,000 in October 2023.
And that’s when the price finally broke up and out of that range.
However, during that time it formed what’s known as a Symmetrical Triangle (shaded area).
The Symmetrical Triangle is generally a continuation pattern that moves in a triangular formation.
The peak of the triangle however, does not move up or down.
Instead, the price moves in a sideways fashion, within an extended range until it converges to an apex.
Once the price reached 3/4s of the apex in October, it finally broke up and out of it.
This set a new year precedent that the buyers were in control. And that demand, pushed the price up.
And since then, we have seen strong buying.
Now according to my calculations, we can expect the gold price to head up to the next resistance (ceiling level) at $2,236.
Here’s how we’ll profit from the 9.7% gold rally
First, I’ll buy Gold CFDs and hold until they reach my first target at $2,236.
Second, I’ll look to buy gold listed companies on the JSE like Anglo Gold, Harmony and DRD Gold.
If you want to join me in the gold rally rush then click here for your next SMS with instructions.