ActivTrades: U.S. economy slowdown, $80 oil, more expensive gold likely 2024 highlights

An economic slowdown in the United States with potential depreciation of the dollar, a generally stable oil price of around $80 a barrel and higher gold prices are among global economic highlights predicted by the ActivTrades brokerage for 2024.

Falling inflation in the United States, which plunged to 3.4 per cent by the end of 2023 from 9.1 per cent in June 2022, is expected to result in minor key interest rate cuts by the Federal Reserve, according to ActivTrades senior analyst Ricardo Evangelista.  

This is likely to entail a bond market rally with falling yields and a growing risk appetite that “will support stocks and be bearish for the dollar”, though “predicting the performance of the greenback is not an easy task”, a 2024 outlook report by the London-based brokerage quotes Evangelista as saying.

Oil will most likely linger around $80 a barrel, the analyst forecasts.

The possibility of the price being pushed up by potential supply issues in the geopolitically unstable Gulf region would be offset by developments in China and within OPEC+, the Organization of the Petroleum Exporting Countries and its allies, according to Evangelista.

The economy of China, the world’s number one oil importer, is “going from bad to worse” and is expected to need less oil while frictions within OPEC+ suggest the group may abandon voluntary output cuts that helped keep the price up in 2023, Evangelista argues.

Gold is poised for further gains, driven by expectations of interest rate cuts, geopolitical uncertainties and global recession fears and “could reach record highs mid-year”, he says.

But as regards interest rates, ActivTrades technical analyst Pierre Veyret argues that central bank plans have proved less dovish than investors generally expected and as a result, he says, stock markets started 2024 on a “less optimistic” note than they ended 2023.

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