Gold’s Potential Surge in 2024: Insights from Bloomberg’s Mike McGlone

Gold is showing promising signs of outshining base metals in 2024, as suggested by Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence. Amidst growing concerns about an economic downturn, gold is increasingly viewed as a potential dominant force in the coming year.

In a December 15 post on X (formerly Twitter), McGlone discussed the evolving relationship between industrial metals and gold. Last year saw a noticeable contrast, with weakening base metals against a backdrop of strengthening gold. This trend could gain momentum in line with “Federal Reserve policies,” McGlone indicated.

Traditionally, the ratio of the Bloomberg Industrial Metals Spot Subindex to gold tends to rise with monetary tightening and fall when policies are more accommodative. This pattern, observed since 1991, underpins McGlone’s analysis.

Looking ahead to 2024, the dynamics of the metals market are particularly striking. Currently, the ratio of base metals to gold is just above its 2020 low. Although the Fed has hinted at potential interest rate cuts in March, it seems any central bank initiatives to boost the economy might face delays.

With the specter of a global recession on the horizon, central banks might consider easing policies. However, the effectiveness of such measures remains uncertain and could be delayed in impact. McGlone has consistently cautioned about this, citing Bitcoin (BTC) as a key indicator in this context.

In a notable forecast, McGlone anticipates gold could soar to $3,000 per ounce in 2024, while maintaining a bearish stance on Bitcoin and stocks.

McGlone’s analysis suggests a cautious approach. Despite a seemingly resilient US fiscal climate, the relative underperformance of industrial metals compared to gold hints at broader economic difficulties. Gold’s potential rise in 2024, underscored by its safe-haven appeal, may very well surpass that of industrial metals, positioning it as a key asset in a time of global economic uncertainty.