Market Expert Shares New Gold Price Forecast

With the latest inflation data released today, gold investors are keenly considering the future trajectory of gold prices.

While many analysts anticipate that the price of the yellow metal will continue to rise this year, one expert is confident it will remain above a crucial threshold.

### Gold Prices Rally in 2024

Gold reached a peak of nearly $2,450 in May, though it has recently retraced to around $2,300. Nevertheless, optimism persists among many market participants. Analysts from Citi have indicated that gold prices could potentially climb to $3,000 within the next year.

Citi noted, “The path of gold prices is unlikely to follow a straight line, but average prices are expected to trend higher in the second half of 2024 and into 2025.”

In terms of gold mining equities, Taylor Krystkowiak, Vice President and Investment Strategist at Themes ETFs, emphasized in a recent analysis that these stocks have significant upside potential due to their current low valuations. He pointed out that in 2011, the price-to-book ratio for both the S&P 500 and miners was approximately 2x, whereas currently, the S&P 500 trades around 4.8x compared to miners at about 1.9x. This discrepancy in valuations, combined with gold surging to new highs this year, suggests a promising outlook for the mining sector.

Additionally, he explained that stagnant supply due to declining production, paired with increasing demand from central banks, continues to support elevated gold prices and mining equities. Krystkowiak believes the recent dip in gold prices presents a favorable opportunity to invest in gold miners, as their valuations remain historically attractive.

### Gold Prices Forecast for 2024

However, the outlook for gold prices for the remainder of this year is not as aggressively bullish. In an interview, Krystkowiak stated that “given robust demand and constrained supply, it is likely that the price of gold will stay above $2,200 per ounce through the end of 2024.”

He added, “This outlook is also bolstered by historical trading patterns of gold, which tend to stabilize after reaching a new all-time high as it consolidates around a new price level.”

With current prices holding steady above $2,200 an ounce, gold remains above the average all-in sustaining cost of approximately $1,345 per ounce for gold miners. Therefore, Krystkowiak suggests that gold miners will continue to enjoy significantly enhanced profit margins from their gold production, even if prices experience some weakness relative to current levels.

His perspective aligns with that of Citi, which forecasts that the market will remain “well supported above $2,000 to $2,200 per ounce and regularly testing nominal all-time highs into late 2024” before potentially surging to $3,000 in 2025.

Citi’s analysis concludes that a downturn in U.S. economic growth could have a favorable effect on gold, driving increased demand for long-term and safe-haven assets.