Outlook for gold from a good commodity shop, RBCJanuary 11, 2024 Gold Assayer 2024–25 Outlook – January 2024 Issue
With this forecast revision, we raise our baseline forecast, with our low and middle scenarios moving the most on the back of strong narrativedriven gold prices, tempered by some ongoing headwinds. While on paper the eventual rate cut narrative and soft landing open up the field for gold to rally more than we are forecasting, based on some parts of our macro analysis we think gold is somewhat over-priced already. Additionally, with investors still sitting on the sidelines and consumption (whether consumer or investor) set to be held back more than otherwise by high gold prices, especially in non-USD currencies, our forecasts assume that gold grinds higher rather than leaps higher.
In this note, our 2024 base case moves to $2056/oz, and our low and high scenarios move to $1933/oz and $2286/oz, respectively. We also roll out our 2025 forecasts at $2160/oz for our base case, $1959/oz for our low scenario, and $2394/oz for our high scenario. All eyes will likely stick to the Fed and data dependency will likely remain. At points where the rate cut narrative is questioned, we view our low scenario as the floor, and we think that our high is the ceiling unless some major unexpected catalyst materializes.