Why Precious Metals Are Set to Shine: Gold and Silver on the Rise
Brandon Green

Precious metals like gold and silver have always been the go-to investments when things get shaky. Right now, they’re not just sitting pretty; they’re gearing up for a big leap. Here’s why these metals are set to shine brighter than ever, backed by some solid data.

Economic Uncertainty: The Safe Haven Effect

In a world where the economy seems to be on a constant rollercoaster ride, investors are seeking safe havens. Gold has always been that comforting safety net. Gold prices have increased by 25% over the past year as global economic uncertainty continues. With ongoing issues like high national debts and slow economic growth, more investors are expected to turn to gold, driving its price higher.

Inflation Concerns: The Hedge Against Rising Prices

Inflation – that sneaky increase in prices that makes your money worth less – is another big factor. The US inflation rate hit a 13-year high at 5.4% in mid-2023. Historically, gold has performed well during high inflation periods. For example, during the inflation surge of the late 1970s, gold prices soared from around $200 per ounce to over $800 per ounce. As current inflation fears grow, more investors are likely to buy gold to protect their wealth, pushing prices even higher.

Central Bank Policies: Low Interest Rates Boosting Demand

Central banks around the world have been keeping interest rates super low to stimulate economies. In the US, the Federal Reserve has kept rates near zero since the onset of the COVID-19 pandemic. Low interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive. Additionally, central banks themselves are buying gold. In the first half of 2024, global central banks purchased 483 tonnes of gold, a record high and 5% above the previous record of 460 tonnes in the first half of 2023. This trend is likely to continue, further boosting gold prices​.

Silver’s Industrial Demand: The Double-Edged Sword

Silver is a bit of a two-for-one deal. Not only is it a precious metal like gold, but it’s also a key player in various industries. According to the Silver Institute, industrial demand for silver is projected to grow by 11% in 2024, driven by the electronics and solar energy sectors. JP Morgan predicts that silver prices could reach $40 per ounce by 2025, up from the current $25 per ounce, thanks to this rising industrial demand.

Technological Advancements: Driving Silver Prices Higher

Technological advancements, particularly in green technologies, are fueling silver demand. For instance, the production of solar panels, which use a significant amount of silver, is expected to grow by 30% over the next five years. As the world pushes towards more sustainable energy sources, the demand for silver will increase, potentially pushing its price higher. Moreover, the electric vehicle (EV) market is accelerating, and EVs require a substantial amount of silver for their batteries and electronics. This adds another gear to silver’s upward trajectory.

Geopolitical Tensions: The Global Tug-of-War

Geopolitical tensions often send ripples through the global economy, and precious metals usually benefit from the ensuing uncertainty. For example, during the US-China trade war, gold prices surged by 20% in 2019. With ongoing geopolitical issues, such as the Russia-Ukraine conflict and tensions in the South China Sea, investors are likely to seek the stability of gold and silver, driving their prices up further. Additionally, in times of political unrest, governments and investors alike flock to gold as a secure asset, further increasing its value.

A Golden Opportunity

Gold and silver are poised for significant gains. Economic uncertainty, inflation concerns, central bank policies, industrial demand, technological advancements, and geopolitical tensions are all setting the stage for these precious metals to rise in value. For investors looking for stability and growth, gold and silver offer a glittering opportunity backed by solid data.

Brandon Green leads Sales and Business Development for Neptune-GBX as a Consulting Advisor. Prior to joining Neptune in 2023, Brandon’s experience spanned multiple industries. Several notable experiences included: Sun Life Global Investments, where he wholesaled mutual funds and annuities to advisors; Sprott Money, a physical bullion broker owned by Eric Sprott of Sprott Asset Management; and Strategic Wealth Preservation (Cayman), where he managed sales, products, and trading. Brandon also holds the Chartered Investment Manager (CIM®) designation.

 

 

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