Precious metals are having their long-awaited moment, glinting attractively as inflation soars and markets wobble.
Gold breezed up 0.19% to $2,033 an ounce this morning, while silver rose 0.32% to $23.02. Palladium also strengthened 1.19% to $989.84.
“Precious metals remain a sought-after inflation hedge and safe haven amidst economic uncertainty,” said Tobi Opeyemi Amure, an analyst at Trading.Biz.
“While rate hikes to curb inflation may temporarily dampen appeal, these dips present buying opportunities.”
What’s driving growth? A few key trends:
- A softer dollar makes commodities more appealing globally, lifting prices
- Inflation hitting 40-year highs prompts investors to turn to traditional shelters like gold
- Middle East tensions are causing ripples of unease in oil markets, rippling out to precious metals
- Broad economic comedown with slowing China growth only intensifies investor jitters
The economic tea leaves suggest the precious metal outlook will remain positive in 2024. Here’s why:
Inflation still simmering
While December consumer inflation may show a welcome 0.2% monthly uptick, year-over-year inflation is expected to clock in at a blistering 3.2%. Additional rate hikes are imminent with the Fed determined to cool an overheating economy. This will prolong inflation and market uncertainty through 2024.
Oil market tremors
Though oil prices tipped up today on Middle East tensions, America’s top oil watchdog EIA predicts domestic crude production will hit consecutive annual records of 13.2 million barrels daily in 2024 and 13.4 million barrels in 2025.
Slowing China growth
The World Bank forecasts China’s GDP to decelerate to just 4.5% in 2024, dragged down by three years of lackluster global expansion.
The takeaway?
Savvy investors should capitalize on any precious metal price drops to accumulate shares. With gold ETFs like GLD, IAU and PHYS to choose from, it’s easier than ever to add some shine.
While unpredictable, the precious metal outlook remains distinctly positive for 2024. As markets sway and inflation simmers, these assets provide ballast in every portfolio.