By Deep Kaushik Vakil

(Reuters) -Gold investors anticipate record high prices next year, when the fundamentals of a dovish pivot in U.S. interest rates, continued geopolitical risk, and central bank buying are expected to support the market after a volatile 2023.

Spot gold is on track to post a 13% annual rise in 2023, its best year since 2020, trading around $2,060 per ounce.

"Following on from a surprisingly robust performance in 2023 we see further price gains in 2024, driven by a trifecta of momentum chasing hedge funds, central banks continuing to buy physical gold at a firm pace, and not least renewed demand from ETF investors," Saxo Bank's Ole Hansen said.

On Dec. 4, gold hit a record high of $2,135.40 on bets of U.S. monetary policy easing in early 2024 after a perceived dovish tilt from Federal Reserve Chair Jerome Powell, surpassing the previous record scaled in 2020.

The precious metal almost made uncharted territory in May this year as a U.S. regional banking crisis took hold. By October, it had retreated close to $1,800 an ounce until safe-haven demand triggered by the Israel-Hamas conflict spurred another rally.

Investors returned to the popular SPDR Gold Shares exchange-traded fund, which posted net inflows of over $1 billion in November. [GOL/ETF]

A Reuters poll in October forecast prices will average $1,986.50 in 2024. They have averaged above $1,950 so far this year, above any previous yearly average price. [PREC/POLL]

J.P. Morgan sees "a breakout rally" for gold in mid-2024, with a targeted peak of $2,300 on expected rate cuts. UBS forecasts a record of $2,150 by end-2024 if cuts materialise.

The World Gold Council, in its 2024 outlook, projected that a drop of about 40 to 50 basis points in longer maturity yields, following 75-100 points of rate cuts, could translate into a 4% gain for gold. [US/]

INFLATION RISKS

The conflict in the Middle East, uncertainty from elections in major economies, and central bank purchases led by China will also boost safe-haven bullion's appeal next year, analysts predicted.

But, "gold could be forced to unwind some of this year's gains if an inflation resurgence forces the Fed to abandon plans for a policy pivot in 2024," said Han Tan, chief market analyst at Exinity.

Inflation cooling faster than the Fed trims rates may also slow the economy and dent retail buying.

Heraeus Metals expects higher gold jewellery demand in top consumer China this year, with more support possible in 2024 from stimulus measures. [GOL/AS]

By contrast, silver looks set to fall 1% in 2023, trading just under $24 an ounce. It will trend towards $26 an ounce next year, benefiting from improved industrial demand, according to TD Securities.

On track to fall 6% in 2023, platinum will hold a range between $800 and $1,100 an ounce in 2024, Heraeus estimates.

The impact of the energy transition was demonstrated as autocatalyst-dependent palladium fell by more than a third this year, the market's worst performance since 2008.

Palladium, which fell below $1,000 an ounce in November - for the first time in five years - before recovering, faces surpluses as electric vehicles become more popular.

Bank of America expects palladium to average $750 per ounce in 2024 subject to any major supply cuts.

(Reporting by Deep Vakil in Bengaluru; additional reporting by Swati Verma and Polina Devitt;Editing by Veronica Brown and Barbara Lewis)