Chantelle Schieven, Head of Research at Capitalight Research, said that a slower pace of rate cuts could continue to weigh on gold in the near term as investors adjust their market expectations. Geopolitical uncertainty also continues to support gold.
"Geopolitical uncertainty has been a key driver of gold's nearly 30% rally this year. However, the safe-haven premium for gold remains low, as investors are only just starting to focus on some of the geopolitical hotspots," Schieven said.
Rising geopolitical tensions would easily push gold prices up another 10% as a safe-haven asset, Schieven said.
“In that scenario, $3,000 an ounce is not far away. However, it is also possible to see this 10% increase diminish as tensions ease,” the expert assessed.
Looking beyond short-term volatility, Schieven said gold remains well supported as long-term factors come into focus. In addition, gold has the potential to transform markets.
Some long-term factors like rising debt could also become a concern at this point. That would push gold prices higher.
Schieven said that gold prices have increased impressively over the past year, but the precious metal is just starting a new bull cycle.
"The world is moving away from globalization. The US dollar is not disappearing, but its role is decreasing. So some countries will look for alternatives by continuing to buy a lot of gold," Schieven noted.
Another factor pushing gold prices higher is rising public debt levels that are weakening the purchasing power of all fiat currencies, the expert said.
She added that, apart from geopolitical instability, the threat of a global debt crisis is the biggest danger facing the global economy.
“Central banks can’t keep interest rates high. So there’s just more uncertainty about inflation. That alone should keep gold in a bull market for the next few years,” Schieven added.
While gold prices could hit $3,000 an ounce in a short-term volatile move, Schieven said prices will eventually hit that level in a sustained bull market.
Sharing the same view with Ms. Schieven, Mr. Matthew Jones - Precious Metals Analyst at Solomon Global, said that the price of gold could reach 3,000 USD/ounce if the conflict in the Middle East escalates.
"Some investors have avoided selling gold, which has limited supply and added upward pressure on prices. At the same time, with inflation still subdued and the possibility of interest rate cuts, the outlook for gold remains positive in 2024," Jones assessed.
Luciano Duque - Investment Director at C3 Bullion believes that in the short and medium term, gold will have no chance to decline after reaching the $3,000/ounce mark.
“We think gold prices below $2,000 may be something we will never see again in our lifetime,” Duque stressed.
