Should advisors go for the gold in 2024?
Gold has been a bright spot in client portfolios so far in 2023, rising more than 10% and offering investors something tangible – even in ETF form – in an increasingly uncertain geopolitical environment.
So should financial advisors go for the gold again in 2024?
“I’m bullish on gold in 2024 for several reasons, including stubborn inflation, geopolitical tensions and conflicts, and the Fed near, or potentially at the end, of its hiking schedule,” said Eric Sterner, chief investment officer at Apollon Wealth.
Another tailwind for gold, Sterner said, is a potential global economic slowdown as a result of central banks around the world having aggressively hiked interest rates over the past 18 months. While many strategists are debating whether there will be a recession or a soft landing in 2024, he says it’s worth noting that gold has averaged 20.19% returns during the past seven U.S. recessions.
“Once the Fed initiates rate cuts, the U.S. dollar will most likely depreciate, which, in turn, could be yet another tailwind for gold,” Sterner added.
On the other hand, Cyrus Amini, chief investment officer at Helium Advisors, is not seeing such powerful tailwinds, which is why his outlook for gold in 2024 is neutral.
“We include a strategic allocation to gold in most of our client portfolios. Position sizes vary, but are typically between 2% and 5%,” Amini said. “Utilizing liquid ETFs to establish the gold position is typically the most effective method. For most investors, holding or trading physical gold is inefficient versus the alternatives.”
Eric Beyrich, co-chief investment officer of Sound Income Group, meanwhile, expects gold prices to be stable to higher in 2024 as interest rates fall and global uncertainty remains
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