IAUM - Gold: Will 2024 Be A Breakout Year On Rate Cut Hopes?

2024-01-26 21:18:00 ET

Summary

• The central banks’ post-GFC gold buying contrasts sharply with the time when central banks were net sellers of gold from 1982 to 2007.
• Since 2015, gold prices have almost always had a strong negative correlation with the daily change in Fed funds futures two years forward.
• A “soft landing” with minimal rate cuts along the lines of the 75 bps suggested by the Fed’s dot plot may prove bearish for gold.

Originally posted on January 17, 2024

By Erik Norland

Gold had a spectacular run from 2001 to 2011, rallying over 600% from $260 to $1,900 per ounce. Its performance since has been more modest, reaching $2,080 in July 2020, a level it struggled to maintain until it briefly broke out to a new high in December 2023....

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