Gold bugs were well-rewarded in 2023 with the gold price soaring 15% over the year, in US dollar terms.
Bullion ended the year trading for US$2,078 per ounce, its highest annual close on record.
That made it one of the best-performing asset classes of the year.
And, as you'd expect, the soaring gold price offered some heady tailwinds to leading S&P/ASX 200 Index (ASX: XJO) gold stocks.
The Northern Star Resources Ltd (ASX: NST) share price, as one example, leapt 25% in 2023. And that doesn't include the 26.5 cents per share in dividends the ASX 200 gold miner paid out during the year.
Commenting on the big leg up for the gold price in 2023, the World Gold Council (WGC) noted the yellow metal surged "against the odds of rising interest rates and resilient economies".
The WGC added:
The lower than assumed drag from interest rates supports the notion that the gold market is populated by price sensitive buyers alongside investors that buy into stronger prices – a feature of gold's dual nature.
The WGC said the gold price in 2023 was supported by "geopolitical risks, sizable central bank purchases, and intensifying expectations of major central banks lowering rates".
They estimated that central banks contributed between 10% to 15%.
And China was a big player, with reserves at the People's Bank of China (PBoC) rising again last year. Indeed, the PBoC has announced consecutive gold purchases since November 2022.
According to the WGC:
In 2023, the central bank announced a 225t increase in their gold reserves, which reached 2,235t by the end of December. Gold now accounts for 4.3% of the nation's official foreign exchange reserves. And during the past 14 months China's gold reserves have risen by 287t.
That's the year just past.
Now what can investors expect from the gold price in 2024?
What's the outlook for the gold price in 2024?
The yellow metal is currently fetching US$2,024 per ounce, down 2.5% so far in 2024.
Reviewing their own outlook for the gold price in the year ahead, the WGC said:
Our Gold Outlook 2024 painted a somewhat lacklustre picture for gold in 2024. This was driven by the consensus view that a soft landing would be engineered in the US and Europe; China's growth would be soft; inflation risks would abate but longer maturity interest rates would remain stubbornly elevated, and high prices would restrain consumer demand.
But the WGC said the outlook for the gold price has since shifted. The council noted that, "The dramatic move in interest rates and policy expectations following a 'volte face' by the Fed in December may have increased the inflation resurgence risk."
As for the near term, the WGC said:
A tug-of-war between historically positive January seasonality and some pushback against the dovish sentiment that drove prices to all-time highs in December is likely.
