Gold prices hit another record high this week after a strong 2023, and a combination of geopolitical tensions and continued central bank buying should keep demand strong next year, the World Gold Council said, as cited by CNBC.

The price of the yellow metal on Monday exceeded $2,100 per ounce, and spot prices on Friday hovered around $2,030 per ounce.

In its Gold Outlook 2024 report released on Thursday, the World Gold Council said many economists now expect a “soft landing” for the US economy, namely that the Federal Reserve will return inflation to its target level without triggering a recession.

The World Gold Council (which represents gold mining companies) noted that historically the ‘soft landing’ savings environment has not been particularly attractive for gold, resulting in low or even slightly negative average returns.”

“This time around, heightened geopolitical tensions in a key election year for many major economies, coupled with continued central bank buying, could provide additional support for gold,” the WGC added.

The two most significant events for gold demand in 2023 were the collapse of Silicon Valley Bank in the US and a Hamas attack on Israel, the WGC said, estimating that geopolitical events added between 3% and 6% to gold prices over the year. .

“In a year of major global elections, including in the US, EU, India and Taiwan, investors’ need for portfolio coverage is likely to be higher than usual,” the report said, looking ahead to 2024.

According to the World Gold Council, another factor supporting the yellow metal is further buying by central banks.

Central banks have been the main source of demand in the global gold market for the past two years, and 2023 is likely to be a record year.

The WGC expects this to continue until 2024.

Reid said the organization was surprised by the large increase in central bank purchases in 2022 and that the pace of purchases continued this year.