Oil and Gold: 2024 Commodities Outlook

NEW YORK - Jan. 11, 2024 - PRLog -- The commodities market anticipates a dynamic 2024, navigating geopolitical risks and monetary shifts. In 2023, global central banks tightened monetary policies, impacting the market. The U.S. successfully controlled inflation, but a high-interest rate environment poses risks.

Geopolitical tensions, particularly in the Middle East's Gaza Strip, threaten global supply chains. This unrest puts oil in the spotlight, with potential impacts on stability.

While commodities excelled in 2021 and 2022 during the post-COVID-19 recovery, 2023 saw a shift towards equities. The S&P 500 recouped losses, finishing 24% up. As we enter 2024, commodities face a pivotal year, marked by a potential U-turn in the Federal Reserve's tightening policy.

**Brent Crude Oil Above $80**

Crude oil experienced 2023 swings, starting at $95 a barrel but dropping in H1 due to unmet Chinese economic expectations. Major producers implemented production cuts, stabilizing prices above $70 a barrel.

Production cuts and geopolitical tensions could support oil above $80. JPMorgan and Goldman Sachs forecast oil prices averaging above $80 in 2024. Geopolitical tensions and expected easing of monetary policy might push prices above $90 in H2.

**Gold to Record Highs**

Gold surged 13% in 2023, benefiting from rising interest rates and a stronger dollar. Despite being non-yielding, it thrived on geopolitical tensions. Closing 2023 strong, gold anticipates 2024 gains.

Investors foresee record gold prices in 2024, counting on a dovish U.S. pivot. Lower interest rates, reducing opportunity costs for non-yielding assets, favor higher gold prices. The ReelShares Precious Metals Fund is an option for portfolio diversification.

After reaching $2135 an ounce in 2023, JPMorgan predicts $2,300 in 2024. UBS expects highs of $2,150 with interest rate cuts, while the World Gold Council sees a 4% gain following rate cuts.

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