The price of gold has experienced a significant surge in the last month, rising by over 10%. Starting at $1,815 in early October, it now stands at around $2,000 per ounce, marking its highest value since May 2023.
The possibility of a US recession by the end of 2023, as predicted by some, could further boost the demand for gold. McGlone suggests that the decline in copper and other industrial metals reflects weakening global growth, aligning with Bloomberg Economics’ outlook of a potential US recession by year-end.
In contrast, the outlook for riskier assets like stocks appears less optimistic. Recent weeks have witnessed a significant drop in US stocks due to rising Treasury yields and political tensions. Analyst and investor Puru Saxena anticipates further challenges for the S&P 500, with a brief “relief rally” expected in the latter part of 2023. However, this relief is projected to be short-lived, and the overall stock market outlook is less positive.
According to Bloomberg expert Mike McGlone, this upward trend in gold may continue, with the potential to reach as high as $3,000 in 2024. Despite challenges such as a strong US dollar, a rebounding stock market, and high interest rates, gold has performed exceptionally well, indicating the potential for further growth.
Saxena speculates that the bear market could persist until 2024, potentially reaching its lowest point at that time.
