Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
Gold price has consistently stood above $2,000 per ounce despite an unfavourable start to January. Most analysts believe that gold prices have the ability to reach new highs in 2024, and the primary factor driving gold investment demand remains the Federal Reserve’s interest rate cuts.
JP Morgan (JPMorgan) commodities analysts said on Monday (January 22), the only bullish structural bull market this year is gold and silver, the U.S. inflation rate is expected to fall below 3% this year, supporting the Federal Reserve’s multiple rate cuts.
Analysts point out that economic and geopolitical uncertainty is often a positive for gold. In the initial stages of the past three rate-cutting cycles, gold’s performance has been very strong. Gregory Shearer, head of base and precious metals strategy at JPMorgan, said that of all the metals, the medium-term bullish forecasts for gold and silver in 2024 to the first half of 2025 have the most confi.
The analyst noted that gold prices remain under pressure to fall back slightly in the short term as the Federal Reserve’s first rate cut of the year is likely to come later than the market expects. However, any price pullback in the coming months should be viewed as a buying opportunity, with a breakout rally set to begin in mid-2024 as U.S. gross domestic product growth slows.
JPMorgan’s research arm forecasts that the Federal Reserve will cut rates by 125 basis points in the second half of 2024, 25 basis points higher than last month’s forecast. Analysts believe the central bank will try everything to avoid the US economy falls into recession.
Analysts believe US core inflation will slow to 2.4 per cent in 2024 and 2.2 per cent in 2025 before returning to the central bank’s 2 per cent target in 2026. And falling Treasury yields will push gold prices to new nominal highs in the second half of 2024, forecast to average $2,175 an ounce in the fourth quarter and peak at $2,300 an ounce in the third quarter of 2025.
Analysts added that recent ETF outflows are expected to reverse as interest rates eventually retreat, and retail-led ETF inflows are also expected to boost gold investor demand, thus consolidating the uptrend in gold prices.
