According to Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, the gold price has increasing potential to outperform base metals in 2024. Essentially, the precious metal is getting stronger, McGlone said. Moreover, feared economic downturns will likely further strengthen gold’s dominance in the coming year.
Changing dynamics between industrial metals and gold
cryptokoin.comAs you follow from , the gold price settled above $2,000 as the Fed sent doves. Senior Commodity Strategist Mike McGlone shared about the changing dynamics between industrial metals and gold. McGlone emphasizes that weakening base metals in particular contrast with gold, which strengthened last year. The Commodity Strategist suggests that this divergence could accelerate “if Fed policies serve as a reliable indicator.” In this context, McGlone made the following statement:
Global recession path and base metals weak against gold: Industrial metals’ decline and gold’s rise in 2023 are trends that could accelerate in 2024 if Fed pivots are any guide. Since the Bloomberg Industrial Metals Spot Sub-Index was first calculated in 1991, the index’s ratio to gold has tended to decline during periods of expansion and easing along with cycles of tightening.
Historically, the ratio of the Bloomberg Industrial Metals Spot Sub-Index to gold widens with monetary tightening. Conversely, it decreases when policies are relaxed. McGlone’s observations are based on this pattern, which has been observed since 1991.
Mike McGlone’s 2024 price prediction: $3,000
In particular, the shared analysis shows the current state of the metals market. The ratio of base metals to the price of gold is quite low. It’s also slightly above the low point of 2020. Although the Fed has hinted that it will cut interest rates in March, it indicates that the Fed’s efforts to stimulate the economy may experience further delays.
A potential global recession is looming, and central banks are likely to ease policies to address it. Still, the effectiveness of such actions is unclear. Therefore, it may come with significant delays. Mike McGlone constantly warns about this and mentions Bitcoin (BTC) as a leading indicator.
Interestingly, the Senior Commodity Strategist is bearish on Bitcoin and stocks. On the other hand, he predicts that the gold price will reach $ 3,000 in 2024. All things considered, McGlone leans towards a cautious interpretation. He argues that despite a resilient US financial environment, the relative underperformance of industrial sectors against gold points to broader economic challenges. Gold may be ready to shine amid uncertainty. McGlone’s rise points to safe-haven appeal that could eclipse industrial metals in 2024.
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For the rest of the article, “Gold Will Rule 2024!” Macro Guru Announces His Predictions