Gold and silver outlook 2024: Here’s what to expect from precious metals next year

The ongoing geopolitical tensions, expectations of rate cuts and concerns over the health of major economies are likely to support gold prices going ahead. The yellow metal has rallied over 12 per cent so far in the current calendar year. MCX Gold has advanced to Rs 61,221 per 10 gram on December 11, 2023, against Rs 54,556 per 10 gram on December 30 last year.

Should one add gold to their portfolio for 2023? Vandana Bharti, AVP, Commodity Research, SMC Global Securities, told Business Today that gold never fails to enchant investors with its extraordinary returns. Since its launch on MCX in 2003, gold has experienced only four declines. It began its journey at Rs 5,810 and reached a record high of Rs 64,640 per 10 gram, reflecting a remarkable return on MCX. Silver, on the other hand, had a value of Rs 7,550 on MCX in 2003 and soared to a record high of Rs 78,590 in 2023. Over the two-decade period, gold and silver yielded impressive returns of 1,012 per cent and 941 per cent, respectively.

“Geopolitical tensions, fears of an economic downturn, expectations of a pause in interest rate hikes and potential cuts in 2024 contributed to gold’s resilience in 2023,” Bharti said adding the year 2024 is expected to bring the burden of two wars, including one between Israel and Hamas.

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“On MCX, gold is anticipated to trade in the range of Rs 57,000-Rs 67,000 per 10 gram with an upside bias. On COMEX, new highs in 2024 are expected, with a wide trading range of $1850-$2250,” Bharti said.

On the other hand, silver advanced nearly 5 per cent on a year-to-date basis till December 11. The market analyst added that increased industrial demand supported silver prices. Technological advancements, especially in areas like solar energy and 5G have created additional demand for silver. The forecast for silver demand in 2023 is a record 632 million ounces, propelled by investments in photovoltaics, power grids, 5G networks, consumer electronics, and rising vehicle output

“The potential downside for silver is seen around Rs 65,000 per kg, while upside targets could reach Rs 88,000 per kg. On COMEX, $30 poses a significant hurdle, with support near $20,” Bharti said. MCX Silver was at Rs 71,303 per kg on December 31.