Precious metals: 2024 outlook

The start of next year could remain challenging for precious metals based on our central forecast that the Fed will be more hawkish than the market is expecting, thus helping to keep the dollar strong. However, abating inflationary pressures and weakening global economic activity should lead major central banks in developed economies to shift their priority from fighting inflation to supporting growth. The start of monetary easing cycles should limit the upside for long-term interest rates, meaning that the drag on gold and silver caused by its opportunity cost could abate somewhat. In addition, the global economic outlook could improve in the later part of 2024, providing a more supportive environment for industrial demand.

Since 2022, there has been what is likely a structural shift in gold demand. On the one hand, investment demand is likely to be lower than in the last decade, but on the other official demand should stabilise at a higher level. On a more tactical basis, the likelihood that interest rates have peaked should help gold prices by lowering the opportunity cost. And long-term interest rates that remain relatively high compared to the recent past need not be completely negative for gold, as high long-term rates could also raise concerns about the ability of highly indebted countries to finance their debt. In such an environment, one would likely see increasing inflows into gold, which bears no default risk.

Overall, however, while we expect gold prices to appreciate moderately in 2024, gold’s outperformance relative to other precious metals should end. Silver looks to us the most attractive of precious metals because of our expectations that major central banks will start easing rates as well as prospects for long-running physical deficits. Platinum should continue to outperform palladium, which remains unattractive in our view.

Longer term, the structural shift towards green energy could also lead to higher industrial demand for silver, but also for platinum thanks to rising fuel cell needs. Overall, next year should prove more supportive of precious metals, but with gold performing less well than others (with the exception of palladium).

Our 12-month projections per troy ounce are USD2,100 for gold, USD27 for silver, USD1,030 for platinum and USD1,050 for palladium.