Stable value

Gold and silver: record metals in 2024

Posted by MoneyController on 05.02.2024

What is the outlook for gold and silver this year?

The gold price target

One of the consequences of the monetary easing expected this year is the appreciation of assets such as gold and silver. This is the prediction of Joni Teves, precious metals strategist at UBS, as reported by CNBC in an article by Lee Ying Shan: Teves believes gold could reach $2,200 an ounce. However, the target is not far from the current price of just under $2,030 an ounce.

The correlation between safe-haven assets and interest rates

These forecasts are based on the inverse correlation between safe-haven assets (and others) and interest rates: some assets priced in dollars, such as gold and silver, benefit from a fall in interest rates for at least two reasons: a) some forms of savings (those offering returns linked to interest rates) lose some of their appeal; b) the reference currency of these assets depreciates, and so their value rises.

Uncertainty and conflict in international relations

In addition to interest rates, the other factor that has pushed gold prices up is uncertainty and bloody conflicts in international relations: the outbreak of war between Israel and Hamas, for example, has led to a rise in the price of gold, which often plays the traditional role of a safe haven asset.  

And silver?

According to Teves, silver could also see some gains this year. Indeed, the grey metal should be able to benefit, at least in part, from the interest rate cuts. If you also take into account the fact that it has more room for growth than gold, given its less than stellar performance in recent months, he explains. It can also be added - as Lee Ying Shan does on 'CNBC' - that silver's performance is also correlated with the performance of the economy, as it is a metal characterised by industrial uses, ranging from the automotive industry to renewable energy technologies.

Read also:

Gold: portfolio insurance even in 2024?

Gold price: 2024 looks promising

Energy commodities and currencies: what to expect in 2024?

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