Gold and silver are anticipated to experience further gains in 2024, driven by the U.S. Federal Reserve’s expected interest rate cuts, according to forecasts from UBS. The investment bank’s precious metals strategist, Joni Teves, highlights the potential for gold to reach $2,200 per ounce by the year’s end, citing the inverse relationship between gold prices and interest rates. As interest rates decrease, gold becomes more attractive compared to alternative investments like bonds, especially with a weaker dollar in play. The ongoing geopolitical uncertainties, including the Israel-Hamas conflict, contribute to gold’s appeal as a safe-haven asset.
UBS expects the Federal Reserve to continue easing policy, creating a favorable scenario for silver. Teves notes that silver tends to outperform gold in such situations and suggests a potentially dramatic upturn. Despite silver’s recent underperformance compared to gold, the strategist sees an opportunity for a significant positive shift. Silver’s close ties to the overall economy, given its widespread industrial applications, further support the optimistic outlook. Gold is currently trading at $2,052 per ounce, while silver is priced at $22.69 per ounce.