Gold is one of the most highly sought-after metals. It is renowned for its intrinsic value and allure as a safe-haven asset. It also symbolizes wealth and stability, making it a popular and timeless investment choice for both traders and central banks worldwide.
As we start the year of 2024, the question arises: How worthy is gold in the face of evolving economic, geopolitical, and societal challenges?
This article delves into the multifaceted facets of gold's significance and explores the outlook for gold prices in the current year.
Trading Gold Futures
Being one of the valuable metals in the world, Gold is also traded in the futures market. There are many different gold futures trading contracts across the different exchanges. This ranges from Gold Perpetual Futures Contract to Micro Gold futures and E-mini Gold futures.
Find out more about the 5 Things to Know About Gold Futures.
Traders can look to invest in gold futures through Orient Futures Singapore. Here are the different exchanges and the gold futures contracts that they offer:
APEX Gold Futures
The Asia Pacific Exchange (APEX) offers Gold Perpetual Futures Contract that traders can trade through Orient Future Singapore.
Orient Futures Singapore currently hold membership to APEX, which would make trading Gold Futures more accessible.
COMEX Gold Futures
The New York Mercantile Exchange Comex Division (COMEX) offers Gold Futures, Gold TAS Futures, E-mini Gold Futures, and Micro Gold Futures.
Comex Gold Futures Symbol: GC
DGCX Gold Futures
The Dubai Gold and Commodities Exchange (DGCX) offers Gold Futures and India Gold Quanto Futures.
DGCX Gold Futures Symbol: DG
The India Gold Quanto Futures is a futures contract that derives its value from the price of gold but is settled in Indian Rupees (INR). This unique feature enables traders to participate in speculating on the price of gold without being impacted by exchange rate fluctuations between the Indian Rupee and the US Dollar (USD).
JPX Gold Futures
The Osaka Exchange Incorporated (JPX) offers Gold Standard Futures and Gold Mini Futures.
TFEX Gold Futures
The Thailand Futures Exchange (TFEX) offers 10 Baht Gold Futures, 50 Baht Gold Futures and Gold Online Futures.
How Worthy is Gold in 2024?
Gold Prices
According to the Orient Futures Research Weekly Report on Precious Metals dated 01142024, London gold rose 0.2% to $2049 per ounce. The 10-year U.S. Treasury yield fell to 3.94%, inflation expectations rose to 2.28%, real interest rates fell to 1.66%, the U.S. dollar index dropped 0.01% to 102.4, the S&P 500 index rose by 1.84%, the Chinese yuan depreciated, and Shanghai gold maintained a premium.
Click to find out gold price today and 3 Factors That Affect Gold Prices.
Gold Futures Market News
According to the Orient Futures Research Weekly Report on Precious Metals dated 01142024, market expectations for a Fed rate cut continued to adjust after the unexpectedly strong non-farm employment report.
In December last year, the U.S. Consumer Price Index (CPI) rebounded to 3.4% year-on-year, beating expectations of 3.2% and the previous value of 3.1%.
On a monthly basis, it rose by 0.3%, exceeding the expected 0.2%, and the previous value of 0.1%. Core CPI fell slightly from 4% to 3.9%, higher than the expected 3.8%. After the data was released, expectations of a rate cut further decreased, putting pressure on gold.
Rising food prices supported overall inflation, energy prices fell slightly, most core commodity prices declined, but car prices rebounded. Core inflation is still driven by a 0.5% monthly increase in rent.
Real estate prices stopped falling and rebounded in March 2023, and the pace of rent cost decline slowed. In addition, travel-related costs remain high, and healthcare and leisure services have increased significantly.
The stickiness of core inflation is expected to exceed expectations in 2024, and market expectations for a Fed rate cut will also fluctuate. The U.S. December Producer Price Index (PPI) released on Friday was lower than expected, causing market rate cut expectations to rise again. Combined with geopolitical risks triggering safe-haven sentiment, gold rose significantly on Friday, recovering the lost ground for the week.
Hawkish comments from Fed officials, while the possibility of another rate hike is low, the duration of maintaining high-interest rates may be longer than expected. The market's expected rate cut space is much higher than the official expectation, and this expectation gap will continue to be a focus of subsequent trading.
The U.S. Treasury's auction data for the 10-year Treasury bond was good, pushing down Treasury yields. However, the market still needs to digest the new issuance pressure brought about by future Treasury financing. The reverse repurchase scale has dropped to below $700 billion, and the liquidity situation in the market needs to be monitored in the future. The Fed's balance sheet will also be adjusted in 2024.
Short-term adjustments to rate cut expectations bring downward pressure on gold. Gold speculative net long positions have fallen from high levels, and ETFs have also seen outflows again.
Geopolitical risks in the Middle East are recurring, and market risk aversion sentiment still exists, providing some support for gold prices.
Outlook Future of Gold Prices
According to Trading Economics, price of gold is expected to trade at 2089.21 USD/t oz. by the end of this quarter, and estimated to trade at 2158.85 USD/t in 12 months’ time.
Start Trading With Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us.
We provide bespoke services to our professional clients, tailored to their corporate and individual needs. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
