

Long Term Gold Invesment is a topic that involves various factors, such as the global economic outlook, the inflation rate, the US dollar strength, the interest rate environment, the supply and demand of gold, and the investor sentiment. Different experts may have different opinions and predictions based on their analysis and assumptions.
Forecast of Gold
According to the World Gold Council, gold had a strong 2023, defying expectations amid a high interest rate environment, and outperforming commodities, bonds and most stock markets1. As we look forward to 2024, investors will likely see one of three scenarios: a soft landing in the US, a hard landing in the US, or a global recession1. Each scenario will have different implications for gold prices and demand.
Soft Landing Scenario
In the soft landing scenario, which is the market consensus, the US economy will slow down gradually and avoid a recession, while the rest of the world will benefit from the easing of trade tensions and monetary stimulus. This scenario is expected to be positive for gold, as it will support the demand for jewelry, technology, and central bank purchases, while keeping the inflation rate above the interest rate, resulting in negative real yields. The World Gold Council projects that gold prices will average $2,050 per ounce in 2024 under this scenario1.
Hard Landing Scenario
In the hard landing scenario, which is less likely but still possible, the US economy will enter a recession in 2024, triggered by a sharp decline in consumer spending, a collapse in the housing market, or a financial crisis. This scenario will be very bullish for gold, as it will increase the demand for safe-haven assets, while the Fed will cut interest rates to zero and resume quantitative easing. The World Gold Council projects that gold prices will average $2,200 per ounce in 2024 under this scenario1.
Global Recession Scenario
In the global recession scenario, which is the least likely but most severe, the US recession will spread to the rest of the world, resulting in a synchronized downturn that will last longer and deeper than the 2008-2009 crisis. This scenario will be extremely bullish for gold, as it will trigger a massive flight to quality, while the central banks will adopt unconventional monetary policies, such as negative interest rates, helicopter money, or debt monetization. The World Gold Council projects that gold prices will average $2,400 per ounce in 2024 under this scenario1.
Of course, these scenarios are not mutually exclusive, and there may be other factors that could affect the forecast of gold investment, such as geopolitical risks, regulatory changes, or technological innovations. Therefore, it is important to monitor the market developments and adjust the expectations accordingly.
1: Gold Outlook 2024 | World Gold Council
Factors That Affect Gold Prices
There are several factors that affect gold prices, such as:
- Demand for gold: Gold is used for jewelry, investment, technology, and central bank reserves. The higher the demand for these purposes, the higher the price of gold.
- Gold supply: Gold is mined from the earth and recycled from existing sources. The lower the supply of gold, the higher the price of gold.
- Value of the US dollar: Gold is priced in US dollars, so the exchange rate between the dollar and other currencies affects the price of gold. A weaker dollar makes gold cheaper for foreign buyers, increasing the demand and price of gold.
- Inflation: Gold is seen as a hedge against inflation, which erodes the purchasing power of paper currencies. When inflation rises, the demand and price of gold also rise.
- Uncertainty: Gold is also seen as a safe-haven asset, which attracts investors in times of economic, political, or social turmoil. When uncertainty increases, the demand and price of gold also increase.
You can learn more about these factors from these sources: What Drives the Price of Gold?, 5 Factors That Affect Gold Prices, Gold Prices: Impact of The U.S. Dollar. I hope this answer was helpful.
Some other safe-haven asset that investors may consider during times of market uncertainty are:
Defensive Stocks
Defensive stocks are stocks of companies that provide essential goods or services that are in constant demand, regardless of the state of the economy. Examples of defensive sectors include utilities, health care, consumer staples, and telecommunications. Defensive stocks tend to have stable earnings and dividends, and are less volatile than cyclical stocks, which are more sensitive to economic fluctuations.
- You may want to look at this page for Silver Invesment