Gold Price Forecast - April 2024

Key Takeaways

• Gold reached new all-time highs jumping above $2,200
• The sustained price strength illustrates investors are buying on the dips
• Fed forecasts 3 rate cuts in 2024 and 2025
• Macro environment progressively more favourable for precious metals

March has been an astonishing month for gold. Indeed, bullion has repeatedly reached new all-time highs. Looking ahead, we will delve deeper into the current scenario, analyzing the outlook for gold and the key market drivers that could influence its price in April 2024.

Gold Price

Gold seems to have entered a new era, a new paradigm. The precious metal has previously surpassed the $2,000 mark only on three occasions, in August 2020, March 2022 and May 2023, but bullion had never been able to hold these levels for long, as investors started selling on the peaks.

What we have seen in the last few months, though, seems different: gold reached and surpassed the $2,000 threshold, then the price consolidated laterally for a few weeks, and it continued its rally, skyrocketing first up to $2,140 and then up to $2,222.

After the FOMC meeting of March 20^th, despite the Federal Reserve having postponed the first interest rate cut, bullion reacted positively, showing relatively little volatility. Moreover, the number of investors closing their long positions on gold to take profit has been more than offset by the number of buyers.

Overall, the main scenario remains supportive for gold even though the continuation of the rally might be at least partly linked to the Fed’s decisions and bond yields.

Central Banks and gold

Investors and traders are still looking to the Federal Reserve and bond yields as major market drivers for the upcoming months. Expectations for central bank rate cuts have lifted both gold and stocks. But even as the FOMC decided to keep rates unchanged at the 5.50% level, gold reacted positively, confirming that investors are still buying on the dips.

The decision of Fed chairman Jerome Powell and the US central bank’s leadership team to hold fire was most likely for two reasons: first, there are still concerns of a resurrection of inflation pressures; second, the macroeconomic data has been solid so far, showing that the US economy should be able to hold the current interest rate level for a few more months.

At the same time, the Fed’s Dot Plot shows that bankers are predicting to cut rates three times in 2024 and 2025. In other words, rates should progressively decrease, improving the environment for gold and other precious metals.

Gold Technical Analysis

From a technical perspective, the scenario remains supportive. The positive momentum has gained strength, even if it seems difficult for gold to continue its rally without a consolidation break. 

In the last few weeks, the gold price has jumped into unexplored territory, but we can still point out some key levels. The recent top of $2,222 represents a first resistance zone, while we can find important support zones at $2,140 and $2,080, which are previous gold records.