Oil, Gold, Or The Dollar … In The Year 2024

By : Mohammed Hassan Mohammed Al-Naimi

The year 2023 witnessed geopolitical fluctuations, rising prices and a lot of economic events, which inflamed the pockets of investors around the world, highlighting oil, gold and the dollar at the top of the preferred investment options for many investors.

As the question that always occupies the minds of many investors is repeated, with the volatility of oil, gold and dollar prices globally, is it better to invest in oil, gold or the dollar, or to move to more risky assets such as stocks to achieve gains?

In 2023, crude oil recorded its first annual decline since 2020, as OPEC’s efforts to limit production and growing geopolitical tensions in the Middle East continued to be ineffective to boost appetite for oil, and 2023 proved that Saudi Arabia has the upper hand and the strongest in OPEC and that European sanctions and the Russian oil embargo had a limited effect.

Oil prices jumped by 2% on Tuesday, January 2, 2024, to start the new year on a high as the naval engagement in the Red Sea continues, with the possibility of a possible disruption to supplies from the Middle East, and expectations of Chinese economic stimulus reinforce demand expectations in the world’s largest importer of crude oil.

Global crude supply and demand in 2024 remain the main drivers of oil, as a result of supply bottlenecks due to tensions in the Red Sea, demand growth and OPEC’s commitment to voluntary reduction may be a positive impetus for future oil movements.

Rose gold… Finally, after two consecutive years of losses, gold recorded its best annual performance in 3 years, during 2023, and achieved a strong performance with gains exceeding 12% in 2023 to date in the best annual performance since 2020, Gold started trading at$ 1820 per ounce at the beginning of this year, and is trading today at$ 2077 per ounce.

The price of gold is affected in many respects by the same factors as other commodities, including inflation, supply and demand, geopolitical events and the value of major currencies, including the US dollar, however, the great popularity of gold as a store of value makes it a great opportunity to profit .

Central banks of various countries of the world use gold in stabilizing their currencies as having a large stock in the system of the Central Bank of the country is perceived as a tool to support their money with a strong commodity .

The US dollar … Three consecutive years of strong positive performance of the US dollar, with gains of almost 10% in 2023, such a similar performance occurred between 2012 and 2015 before declining in the five years that followed 2015/2020, and several currencies achieved gains against the dollar in 2023, where the euro made gains of 3.4%, the British pound gained 5.5%, as well as the Canadian dollar gains 2.7%, the Chinese yuan recorded losses of 3.5%, and the Japanese Yen losses of 8%, next year will be 2024 is very busy.

The year 2023 proved that the markets have their own rhythm that no one is able to cope with, and market sentiment is easy to change and high interest rates from central banks are not the only factor that investors rely on, financial markets were and will remain faster than economic realism in re-pricing a new interest cycle and repositioning again, will the strong momentum of investment continue in 2024?