Four Factors To Affect Gold Price

In this post I want to talk about 4 factors that have influenced Gold’s price so far and how these factors will continue to influence the price in 2024. 

1. Global Conflict and even domestic conflict. This is a big thing that has driven gold’s price higher. While a hot conflict has not happened yet, we’ve got very tense situations in the Middle East, as well as war in Ukraine and continued tension with Taiwan. In my opinion the biggest one of these and most important is the Ukraine-Russia conflict. This is because there is the potential for this to really expand. I suppose this could be said for the conflict in the Middle East as well. Taiwan to me is a situation that I think has been tense for decades, so tension between China and Taiwan is not really new. 
2. Interest Rates – Early in the year, there was a belief that rate cuts were coming, around 6-9, possibly as soon as June just a short time ago. However, now the market appears to have priced in just one or two this year. It’s an election year and most feel there will be anywhere from 2-3 cuts. This seems to be one thing driving gold’s price right now, but the main thing appears to be Central Bank buying. There’s reason to believe inflation data is not coming down with what we’ve seen with not only CPI coming hot, but the PCE Deflator and manufacturing data too. 
3. BRICS countries buying gold. This has been happening for quite some time, but it continues and the more gold’s demand increases, the higher gold price should go. This buying also signals faith eroding in the US dollar and also beliefs that global conflicts around the world will get worse. China in particular has been buying gold and was the largest net buyer in 2023; it hasn’t slowed down either in 2024 and it looks like everyday people are turning not just toward gold but silver too.
4. Oil and the United States strategic oil petroleum reserve. The conflict in Gaza has definitely made it appear we could see a big spike in oil prices. To make matters worse in the US , we’ve drained our Strategic Petroleum Reserve to levels not seen since this 1980’s. This has helped artificially control inflation, so any big increase in the price of oil would naturally increase inflation and kill any hope of a rate decrease for 2024. And there’s good reason to think an increase in oil price is coming. For one, summer is right around the corner and that almost always drives up the price of oil. 

What other factors do you think will strongly drive gold’s price this year?