Geopolitics and central banks could keep gold demand hot in 2024, World Gold Council says

cnbc.com:

Gold prices hit another record high this week after a roaring 2023, and a combination of geopolitical tensions and continued central bank buying should see demand remain resilient next year, according to the World Gold Council.

The yellow metal broke through $2,100 per ounce on Monday before moderating slightly, and spot prices were hovering at around $2,030 per ounce early Friday.

In its Gold Outlook 2024 report published Thursday, the World Gold Council noted that many economists now anticipate a «soft landing» in the U.S. — the Federal Reserve bringing inflation back to target without triggering a recession — which would be positive for the global economy.

The industry body (which represents gold mining companies) noted that historically, soft landing environments have «not been particularly attractive for gold, resulting in flat to slightly negative average returns.»

«That said, every cycle is different. This time around, heightened geopolitical tensions in a key election year for many major economies, combined with continued central bank buying could provide additional support for gold,» the WGC added.

Its strategists also noted that the likelihood of a soft landing is «by no means certain,» while a global recession is still not off the table.

«This should encourage many investors to hold effective hedges, such as gold, in their portfolios,» the WGC added.

The two most significant events for gold demand in 2023 were the collapse of Silicon Valley Bank and the Hamas attack on Israel, the WGC said, estimating that geopolitical events added between 3% and 6% to gold's price over the year.

«And in a year with major elections taking place globally, including in the U.S., the EU, India, and Taiwan, investors' need for