Agio Gold Sector Fund Market Update: January 2024

Gold Sector Outlook - 2024

The gold sector maintains a bullish outlook as we enter 2024. The "real price" of gold is on a sustained upward trajectory, outperforming major industrial commodities and reinforcing our positive thesis. Notably, gold's nominal price has recently reached new all-time highs, peaking at $2,150 in December. This contrasts with the downtrends observed in most other commodities. The widening gap between falling input costs (such as oil, labor, and blasting agents) and the steady revenue from gold mining suggests an ongoing margin expansion. This expansion is yet to be fully reflected in the equity prices within the sector, but we anticipate this will change soon.


Macro-Economic Landscape

The global economy continues its shift from expansion to a post-bubble contraction in credit. Despite this, risk assets have shown remarkable resilience since the November lows. Historical data reveals a pattern of market strength around the start of calendar years, as evidenced by:


Historical Peaks

Dow Jones Industrials - January 11, 1973

Silver – January 18, 1980

Nikkei – December 30, 1989



The year 2024 is poised to be a year of volatility, potentially surpassing the surprises of 2023. In this uncertain environment, the gold sector stands out as a promising opportunity amidst a diminishing pool of viable investment options.



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