Economic uncertainty spurs unprecedented demand for gold.

As 2024 approaches, NewEdge Wealth’s Ben Emons anticipates a remarkable year for gold, predicting an unprecedented surge in demand for the precious metal. Emons, an expert in fixed income, recently shared his insights with CNBC’s “Fast Money,” highlighting December’s historical trend of increased gold interest. The allure of gold reached new heights last Friday, with its value soaring nearly 2% to a record $2,089.70 per ounce. Emons attributes this surge to a unique combination of economic and geopolitical factors, along with the metal’s traditional appeal during times of uncertainty and market optimism.

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Emons further elaborates on the intricate dynamics at play. The anticipation of potential recessionary conditions, coupled with the upcoming elections, has intensified gold’s attractiveness. This appeal is amplified when markets exhibit a risk-on attitude, coinciding with falling real and interest rates. In a recent client note, Emons underscored the rarity of simultaneous gains in both gold and stock markets, as witnessed in November. This phenomenon, he explains, is typically a precursor to major easing cycles in the economy. Emons confidently projects that this strength in gold’s performance will persist into the new year.

A key factor in this bullish outlook is the aggressive acquisition of gold by central banks amid a shrinking supply. Emons predicts this dynamic could propel gold toward the $2,100 mark, offering a potential boon for sectors like utilities, which are poised for market leadership in early 2024. Supporting Emons’ views, “Fast Money” trader Guy Adami also points to the dollar’s recent trajectory as a positive sign for gold. He suggests that falling interest rates, leading to a weaker dollar, could provide significant momentum for gold’s value. As of the latest market close, gold has already seen a 14% increase this year, signifying its robust performance and solidifying its position as a coveted asset in the global financial landscape.