Gold still has plenty of momentum to hit all-time highs in 2024 – State Street’s George Milling-Stanley


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(Kitco News) – The Federal Reserve’s signal that interest rates will be going lower in 2024 has created some healthy momentum in the gold market, and that will lead to record highs in the new year, according to one market strategist.

In an interview with Kitco News, George Milling-Stanley, chief gold strategist at State Street Global Advisors, said that despite gold’s recent blowoff top, there is still plenty of room in the marketplace for higher prices.

“When gold finds its momentum, there is no telling how high prices can go,” he said. “There is a very good chance we will see all-time highs next year.”

While Milling-Stanley is bullish on gold, he added that he is not expecting to see a breakout anytime soon. He noted that while the Federal Reserve is looking to cut rates next year, the question still remains when it will pull the trigger. He added that the question of timing should keep the precious metal in its current range in the near term.

In State Street’s official forecast, Milling-Stanley’s team sees a 50% chance of gold trading between $1,950 and $2,200 an ounce next year. At the same time, the firm sees a 30% chance of prices trading between $2,200 and $2,400 an ounce.

And with only a 20% chance, State Street sees the potential for gold to trade between $1,800 and $1,950 an ounce.

Milling-Stanley said that the health of the economy will determine how high gold prices go.

“My sense is that we are going to get a period of below-trend growth and possibly a recession. But it is going to be accompanied by probably still sticky inflation on the Fed’s preferred measure. That this will be a good environment for gold,” he said. “If we get a major recession, then our bullish case will be in play.”

While gold’s potential upside is expected to attract new strategic investors, Milling-Stanley said that gold’s long-term support indicates sustainable momentum through 2024.

He said that two ongoing conflicts will keep a safe-haven bid in gold. He added that an uncertain and “ugly” election year will also add to gold’s safe-have allure. He also said that growing demand in India and other emerging markets will provide support for physical bullion.

Milling-Stanley said that the one wild card for the physical gold market remains China, as weak economic growth and financial market instability could price many consumers out of the marketplace in an environment of rising prices.

Finally, further central bank gold purchases will add to the new paradigm shift in the marketplace.

“For the past five years, it has made sense to take profits when gold was above $2,000 an ounce. And I think that’s part of the reason why we may well dip below $2,000 from time to time next year. But at some point, I still think that gold is going to establish itself above that $2,000 level,” he said. “Central banks have been very consistent for 14 years now, buying anywhere between 10% and 20% percent of annual demand. That has been tremendous support whenever gold has shown signs of weakness. I expect that trend to remain in place for many years still.”

Milling-Stanley said that he expects that in a world of economic uncertainty and geopolitical turmoil, any significant selling in gold will be bought relatively quickly.

“The promise of gold for investors has historically always had a dual nature. Over time, not every year, but over time, gold can help to enhance the returns of a properly balanced portfolio. And that at any time, gold is going to reduce the risk and volatility in a properly balanced portfolio,” he said. “I expect this dual promise of returns and some protection will attract new investors in 2024.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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