AI Forecasts For Gold By Year End Are Modest (But Realistic?)

An Introduction

Traditional methods of gold price forecasting involve analyzing historical data and market trends and making predictions based on that information. AI technologies, such as machine learning and deep learning, however, have enabled us to develop more sophisticated models that can analyze vast amounts of data and identify patterns that are not apparent to the human eye.

Machine learning models use algorithms that can learn from historical data and make predictions based on that information. These models are trained on large datasets of historical price data, and they can identify patterns and relationships between different variables in the data. The model can then use this information to predict future price movements accurately.
Natural language processing (NLP), a type of AI that is designed to analyze and understand human language, analyzes news articles, social media posts, and other sources of information for sentiment analysis, which can provide insight into market sentiment and potential price movements.
Combinations of the above, and other techniques, to develop more advanced forecasting models that can make more accurate predictions about future price movements. Source

AI Model Gold Predictions Y/E 2024

finbold.com asked 3 chatbots what they predicted the price of gold would be by the end of 2024 and they got the following:

ChatGPT-4 Turbo Chatbot: “…it’s reasonable to expect continued demand for gold as a hedge against inflation and economic instability but, if inflation is curbed and economies stabilize quicker than anticipated, gold’s appeal may diminish, leading to lower prices. The most likely scenario considers both the potential for ongoing inflationary pressures and the impact of increased interest rates on economic growth and recession risk” and, as such, their predictions are as follows:
- - Bearish prediction of $1,900-$2,000/ozt;
  - Bullish prediction of $2,250-$2,350/ozt.;
  - Most likely somewhere between $2,100 to $2,200 per troy ounce.
Google Bard: “Despite reaching record highs fueled by recession fears and safe-haven demand, gold’s 2024 outlook remains delicately balanced. Inflationary pressures might keep central banks hawkish, limiting significant gains, but deepening recession could trigger policy easing, boosting gold’s allure” and, as such, their predictions are as follows:
- Bearish prediction of $2,005/ozt. if inflation remains fierce;
- Bullish prediction of $2,120/ozt. if the Fed pivots;
- Most likely somewhere around $2,075/ozt.
Grok by xAI (an Elon Musk company) predicts the following:
- an average of between $2,100 and $2,400 per troy ounce…“depending on the potential for a recession, the performance of the US dollar, and geopolitical tensions”;
- a high for the year of $2,800 per troy ounce “based on the potential for a strong recovery in the global economy, increased demand from central banks, and a weakening US dollar…”; and
- as low as $1,800 per troy ounce “based on the possibility of a stronger US dollar, lower inflation, and a less severe recession…” (Source)

The above predictions are somewhat more modest than those of 6 “analysts” who forecast gold rising to $3,500, on average, (ranging from $3,000 to $5,500) by the end of 2024 (see here) and AG Thorson of GoldPredict.com who commented today (see here) that “Gold futures exploded through resistance near %2,560/ozt, confirming a breakout with a medium price target near $2,800/0zt.”