Although it has faced increased volatility in recent weeks, the gold price is back on track to see new highs in 2024 after the most recent Federal Reserve meeting. Indeed, the asset is currently trading above the $2030 level after a key breakthrough occurred yesterday.
Specifically, the metal ascended beyond the $2000 level after several days of struggling to break $1980. Moreover, that ascension had aligned with the Fed policy meeting in which they hinted at incoming interest rate cuts throughout 2024. Now, the asset is once again aligned with optimistic forecasts for the upcoming year.
Also Read: Gold Price Overtakes $2000 as Fed Projects Rate Cuts for 2024
Gold Price Regains Optimal Position for 2024 Breakout
Earlier this month, gold investors made waves when the asset reached a new all-time high. Indeed, the metal was trading at $2150 in a surge that lasted a few days. However, since then, the asset has experienced a noticeable price correction that saw it struggle to break through from the $1980 mark.
Yet, that has changed in recent days, with increased volatility a side effect of uncertain economic developments. Still, the gold price appears to be back on track for new highs in 2024 after the most recent Fed meeting. Specifically, the agency opted to leave interest rates unchanged for the third consecutive meeting. Moreover, they signaled rate cuts to come at some point next year.
Also Read: Gold Climbs 1.5% As US Dollar Weakens & Treasury Yields Fall
MUFG Bank economists discussed the metals outlook for 2024 with FX Street. “Higher rates are typically negative for noninterest-bearing assets,” the bank stated. “Thus, the starting point of rate cuts matters for gold’s outlook.” Additionally, they noted that three rate cuts could easily propel the asset to previously unreached heights.
“Gold- our most structurally bullish call for 2024- is set to hit record levels on a trifecta of Fed cuts,” they added. Ultimately such rate cuts should set the asset on an upward trajectory. Additionally, their consistency could set it on a clear path to heights that rival its previous all-time high set in 2020. Subsequently, it could very well settle beyond the levels even reached earlier this month.
