Precious Metals
Last year was a year that, for some precious metals owners, may have been disappointing. Gold did reasonably well, rising 13% over the course of the year. Silver, on the other hand, lost about 10 cents on the year.
But what was perhaps most disappointing is that neither precious metal showed the breakout growth that many people were expecting. Gold showed some flashes of brilliance, particularly late in the year as it set an all-time high price, while silver continued to lag. So how will gold and silver fare in 2024?
Many analysts are already predicting that the gold price will continue to rise in 2024. JPMorgan analysts expect an average price of $2,175 per ounce by the fourth quarter of the year, while Wells Fargo is predicting an average of $2,200 an ounce.
That would indicate that gold would likely hit another all-time high price this year. And with gold starting the year strong and maintaining its position above the $2,000 mark, it’s giving every indication that 2024 could be yet another great year for gold.
A lot of gold’s performance in 2024 is going to be dictated by what ends up happening with the economy. What would ultimately push the gold price upward is the likelihood of recession and the possibility of Federal Reserve rate cuts.
If the economy remains relatively strong and if the chance of recession seems low, investment demand for gold could remain muted. This isn’t necessarily bad for gold, however, as central bank demand for gold remains strong, and central bank gold purchases may provide a strong price floor for gold this year even if investment demand struggles.
If, on the other hand, the economy begins to fall into recession rather quickly, then investment demand might pick up quicker and the gold price might rise faster. One cautionary point, however, is to remember what happened in 2008.
As 2008 progressed and the likelihood of recession grew stronger in people’s minds (since they didn’t know at the time that the economy was already in recession), the gold price rocketed upward. But as the year progressed and things got really bad, the gold price lost about 30% from those highs as institutional investors looking to drum up quick cash liquidated their gold holdings.
Those liquidations placed downward pressure on the gold price, so that gold fell along with stock markets during the acute phase of the crisis in the fall of 2008. But then gold decoupled and began to gain again, even as stock markets continued to crash.
The gold price went on from there to set an all-time high in 2011, as gold remained a bright spot in a world in which fear and uncertainty reigned in the aftermath of the financial crisis. Could 2024 see history repeating itself?
While silver didn’t have the best year in 2023 in regards to the silver price, there were still some bright spots. For one thing, industrial silver demand was expected to set a record, with 8% growth year-on-year.
That’s no small feat, especially in an economy that is facing significant headwinds. In addition to record industrial demand, the silver deficit remains large, with demand for silver outstripping supply.
All it would take now is for investment demand for silver to pick back up to really give a boost to the silver price. And that could be coming sooner than many expect, especially if the economy weakens.
Analysts at Commerzbank expect silver to end the year at $30 an ounce, which would indicate a growth rate of nearly 30% from its current price. That far outstrips analysts’ expectations for the gold price, and is yet another reminder that the silver price can outperform the gold price during times of economic weakness.
Going back to 2008, the silver price lagged gold then just like it is doing today. And it took silver a lot longer than gold to break off the shackles of an ailing economy and start pushing higher.
But once the silver price began to rise, it more than quintupled by 2011 from its 2008 lows, whereas the gold price made it just shy of tripling. Silver’s overall percentage increase was nearly double that of gold, showing that when safe haven demand becomes a strong driver of precious metals prices, silver can outdo gold.
If we were to see similar performance from silver in the coming years, it would be almost certain that the silver price would eclipse its previous all-time high. And once it removed that albatross from around its neck, how much further could the silver price climb?
With the US economy increasingly looking like recession is imminent, all eyes are going to be on gold and silver as indicators of investors’ fear and sentiment about the state of the economy. If fear of recession grows, and if economic data indicates recession is imminent, the prices of gold and silver could start pushing significantly higher.
Many Americans have already taken steps to start protecting themselves and their finances ahead of any recession. Demand for gold and silver has been strong in recent years as Americans have been proactive in buying gold and silver to help safeguard their finances.
There are numerous options available for those looking to buy gold and silver, from gold and silver IRAs for those trying to safeguard their retirement savings, to gold and silver coins that can be stored at home, in a safe deposit box, or in a bullion depository.
If you’ve never purchased gold and silver before, it’s easy to understand how the process can be daunting. But Goldco has helped tens of thousands of customers just like you benefit from owning gold.
Your Goldco representative can answer any questions you have about gold and silver, whether it’s how a gold IRA works, how to do a gold IRA rollover, or what kinds of coins are or are not IRA-eligible. And because Goldco works with mints around the world to source gold and silver coins, we can guarantee that our coins are 100% authentic.
If you’re looking to take advantage of potential growth in gold and silver prices in 2024, call the experts at Goldco today to learn more about how precious metals can help you safeguard your financial future.
Free Precious Metals Guide
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Free Precious Metals Guide
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DISCLAIMER: This site is general in nature and not tailored to the specific goals of any individual. All investments carry risk. Some of those risks associated with precious metals include the following: prices may rise and fall, which means the value of your metals may go up or down over time and you may sell for more or less than you paid. Past performance does not guarantee future results. Goldco cannot guarantee, assure, or promise future market movement, prices, or profits. Even though Goldco and its representatives are precious metals specialists, we are not licensed financial advisors and do not give financial advice. Additionally, Goldco cannot provide tax or legal advice and will not advise as to the tax or legal consequences of purchasing or selling precious metals or opening a Precious Metals IRA. Individuals should consult with their investment, legal or tax professionals for such services.
