Last year may have left some precious metals owners feeling underwhelmed. Gold performed reasonably well, appreciating 13% over the year. Silver, however, lost about 10 cents. Neither metal demonstrated the breakout growth that many had anticipated. Gold did have moments of brilliance, especially late in the year when it reached an all-time high price, while silver continued to underperform. So, what can we expect from gold and silver in 2024?
Analysts are forecasting a continued rise in gold prices for 2024. JPMorgan analysts predict an average price of $2,175 per ounce by the fourth quarter, while Wells Fargo anticipates an average of $2,200 an ounce. This suggests that gold could hit another all-time high this year. With gold starting the year strong and holding its position above the $2,000 mark, 2024 could be another prosperous year for the precious metal.
The performance of gold in 2024 will largely depend on the economy. Factors such as the likelihood of a recession and potential Federal Reserve rate cuts could drive gold prices upward. If the economy remains robust and the chance of recession seems low, investment demand for gold could remain subdued. However, this isn’t necessarily bad news for gold, as strong central bank demand could provide a solid price floor for gold this year, even if investment demand struggles.
On the flip side, if the economy quickly falls into recession, investment demand might surge, and gold prices could rise rapidly. However, it’s important to remember the events of 2008. As the year progressed and the likelihood of recession grew, gold prices soared. But as the situation worsened, gold prices dropped about 30% from those highs as institutional investors liquidated their gold holdings for quick cash.
These liquidations put downward pressure on gold prices, causing gold to fall alongside stock markets during the acute phase of the crisis in the fall of 2008. However, gold then decoupled and began to rise again, even as stock markets continued to crash. Gold went on to set an all-time high in 2011, remaining a beacon of hope in a world filled with fear and uncertainty following the financial crisis. Could 2024 see a repeat of this pattern?
Despite a lackluster performance in 2023, silver had some bright spots. Industrial silver demand was expected to set a record, with 8% growth year-on-year. This is impressive, particularly in an economy facing significant challenges. Alongside record industrial demand, the silver deficit remains large, with demand outpacing supply.
If investment demand for silver picks up, it could significantly boost the silver price. This could happen sooner than many expect, especially if the economy weakens. Analysts at Commerzbank predict silver will end the year at $30 an ounce, indicating a growth rate of nearly 30% from its current price. This far exceeds expectations for gold and serves as a reminder that silver can outperform gold during economic downturns.
Looking back to 2008, silver lagged behind gold, much like today. It took silver longer than gold to shake off the effects of a struggling economy and start to rise. However, once silver prices began to climb, they more than quintupled by 2011 from their 2008 lows, while gold prices nearly tripled. Silver’s overall percentage increase was almost double that of gold, demonstrating that when safe haven demand drives precious metals prices, silver can outperform gold.
If silver performs similarly in the coming years, it’s almost certain that its price would surpass its previous all-time high. And once that happens, who knows how much further the silver price could climb?
With the US economy showing signs of an imminent recession, all eyes are on gold and silver as indicators of investors’ fear and sentiment about the economy. If fear of recession grows and economic data indicates a recession is imminent, gold and silver prices could start to rise significantly.
Many Americans have already begun to protect their finances ahead of any potential recession. Demand for gold and silver has been strong in recent years, with Americans proactively purchasing these metals to safeguard their finances.
There are numerous options for those looking to buy gold and silver, from IRAs to coins that can be stored at home, in a safe deposit box, or in a bullion depository. If you’re new to buying gold and silver, the process can seem daunting.
If you’re looking to capitalize on potential growth in gold and silver prices in 2024, learn more about how precious metals can help you secure your financial future.
Let us know what you think, please share your thoughts in the comments below.
