European markets closed mostly lower on Monday as traders anticipated interest rate cuts from major central banks in 2024. The pan-European Stoxx 600 index ended the day down 0.1%, with mining stocks taking the biggest hit, shedding 2.4%, while energy stocks dropped 1.6%.

Gold prices reached a fresh record high for the second consecutive day, touching $2,100, as analysts cited geopolitical uncertainty, a weaker U.S. dollar, and the potential for interest rate cuts as catalysts for further gains in bullion heading into next year. These expected rate cuts, along with the anticipation of the U.S. Federal Reserve maintaining its current policy stance in December, propelled the S&P 500 to a 2023 high last Friday after a five-week winning streak. Furthermore, the Dow Jones Industrial Average experienced its best month since October 2022 in November.

Despite efforts by Fed Chair Jerome Powell to temper market expectations for imminent rate cuts, stating that it was premature to conclude that monetary policy was too restrictive, U.S. stocks opened lower on Monday, signaling a return to caution. In Asia-Pacific, stocks were mixed as investors awaited economic data and key inflation readings later in the week.

Executives in the cryptocurrency industry are optimistic about the start of a new bull run, with some predicting fresh all-time highs for bitcoin in 2024 above $100,000. Bitcoin has already rallied over 120% this year, and many believe the surge will continue into the next year.

The outlook for rate cuts in early 2024, supported by a dovish shift in tone from the U.S. Federal Reserve and positive inflation figures in the U.S. and eurozone, has fueled the recent global market rally. However, Barclays strategists express skepticism, stating that they "don't see it" and remain cautious about the sustainability of disinflation. They predict the European Central Bank to make their first rate cuts in July, followed by the Bank of England in August and the Federal Reserve in December.

In mid-morning trading, the pan-European Stoxx 600 was down 0.3%, primarily due to declines in mining stocks, which shed 2.1%, and in oil and gas stocks, which dropped 1.8%.

As the year comes to a close, several investment opportunities are being identified by portfolio managers despite the mixed market environment. With a broadening of the market, there are options to acquire quality companies at lower valuations, according to portfolio manager Amala Balakrishner.

The past five years have witnessed significant changes in the economy, including a shift from a long-standing zero-interest rate regime to rising rates, resulting in higher borrowing costs. However, the previously rampant inflation has slowed down, raising questions about its impact on stocks and interest rates. CNBC Pro has consulted financial advisors and investment experts, who have devised three portfolios catering to investors with different risk appetites, outlining how to allocate $250,000 over the next five years.

Overall, European markets are experiencing a cautious sentiment amidst expectations of rate cuts in 2024. While some remain skeptical, others are hopeful about the continuation of the global market rally. Investors are closely monitoring central bank policies, geopolitical developments, and inflation data to gauge the future direction of the markets.