What’s next as gold reaches USD 2,300? What’s next as gold reaches USD 2,300? What’s next as gold reaches USD 2,300?

What’s next as gold reaches USD 2,300?

Ole Hansen

Head of Commodity Strategy

Key points

  • Gold remains a buy-on-dip market, defying the normal negative impact of dollar and yield strength
  • Silver breaks higher, supported by gold and not least a strong rally in copper
  • Consolidation may follow in the short-term before rate cuts potentially triggers a second leg higher

In our end of March update, we wrote about how gold's recent behaviour, where the yellow metal had been rising without clear reasons to explain the move, deserved a great deal of respect as it pointed to sustained strong underlying demand. Since then, the rally which started back in early October when Hamas attacks on Israel raised the geopolitical temperature, has gone from strength to strength, resulting in last month's 8.3% gain to a record high.

Today, gold reached the USD 2,300 target we set out in our Q1 24 outlook titled “Year of the metals”, where we expressed our bullish views on gold, silver, copper, and eventually also platinum. It is however interesting to note the target was achieved without three important drivers, namely rate cuts, where expectations have fallen from above seven at the start of the year to less than three currently. With rate cuts on the horizon, we envisaged a weaker dollar, and lower real yields would lead to a pickup in demand for ETFs from real money managers. Neither of these have yet materialised, and instead gold has been driven higher by hedge funds, or speculators enjoying the strong momentum that has been set in motion by strong demand from investors around the world responding to heightened geopolitical tensions and debt-financed growth.

In our Q2 24 outlook released earlier this week, we highlighted the reasons why we believe the year-long consolidation phase across the commodity sector is over, not least due to expectations for industrial and precious metals to perform well, together with energy and a heavily shorted grains sector.

In the short term, both gold and silver will likely consolidate, but with rate cuts leading to dollar and yield tailwinds still awaiting on the horizon, we see gold potentially make an extension towards USD 2,500 and silver towards USD 30, the February 2021 high. The biggest threats to prices being the unlikely lowering of the geopolitical temperature, central banks pausing their aggressive gold buying spree while adapting to higher prices, and hedge funds pairing back part of the near 300 tons of gold they accumulated through the futures market last month.

The strong momentum rally that followed last month's breakout above USD 2,075 has so far not been challenged, with a mid-March consolidation only triggering a 50-dollar correction. The lack of notable corrections, potentially challenging recently established longs held by hedge funds and CTAs, has been key to gold's continued rally. Using Fibonacci as a guide, a correction at this stage to USD 2,245 or even USD 2,225 may not be enough to challenge the mentioned long positions. Following a period of consolidation, the prospect for rate cuts and a resumption of central bank buying could potentially see the price reach for USD 2,500 later in the year, while the big line in the sand below remains USD 2,075

Source: Saxo

Silver, meanwhile, has for a while been struggling relative to gold, not least because the white metal has not enjoyed support from central bank buying. During the past month, however, the semi-precious metal which derives around half of its demand from industrial applications has received a boost from a recovering industrial metal sector, not least copper which has jumped to a 14-month high in response to tightening mined supply outlook and Chinese smelters discussing production curbs at a time where hopes for a global recovery in demand gather momentum.

During the past week, the gold-silver ratio has slumped from above 90 ounces of silver to one ounce of gold to the current 84.7, a move that highlights silver's ability to rally hard when it receives dual support from both gold and copper. From a technical perspective, the break above resistance-turned-support around USD 26 was relatively quickly followed by a break above USD 27, the March 2022 high, with the next major level to watch being the USD 28 area, our initial target for the year, ahead of the decade high at USD 30.

Source: Saxo


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.