Send this article to a friend:

October
21
2023

Off the record: silver looks better than gold in 2024 according to LBMA survey
Neils Christensen

Although the Federal Reserve is expected to maintain interest rates at restrictive levels through most of 2024, geopolitical uncertainty will continue to support gold prices in the next 12 months, according to sentiment during the London Bullion Market Association 2023 Global Precious Metals Conference.

According to the LBMA’s annual end-of-conference survey, conference participants said they expect gold to outperform within the precious metals market. However, anecdotal observation and comments during the conference show solid support for  silver, with some analysts saying it is cheap compared to its fundamentals.

"Silver is a metal we need to keep an eye on," said Suki Cooper, precious metals analyst at Standard Chartered.

The LMBA conference survey shows that participants see silver prices trading around $26.80 an ounce by next year’s conference in Miami, Florida. The bullish outlook comes as silver is currently trading around $23 an ounce.

Although both gold and silver have struggled through 2023 as the Federal Reserve has aggressively raised interest rates, the grey metal has managed to hold on to solid gains compared to where prices were trading during last year’s conference. Silver prices were trading around $18.60 an ounce.

Analysts have said that silver industrial demand in the solar sector has provided solid support for the precious metal as investors focus on the global green energy transition.

"Silver's use in Photovoltaic (PV) solar panels is going to drive silver prices higher," said Phillips Baker, CEO of Hecla Mining, on the sidelines of the conference. "This is not an issue that will be going away anytime soon. The need for Photovoltaic solar panels will drive demand for the next decade.

Turning to gold, according to the survey, participants see prices pushing to $1,990.30 an ounce by this time next year. The outlook comes with December gold futures last trading around $1,936 an ounce.

Analysts have noted the ongoing chaos in the Middle East as Israel’s war with Hamas enters its third week, shows how safe-haven demand can impact gold prices. Gold prices are up more than 5% from last month’s seven-month lows.

"With the Fed on hold next year, U.S. monetary policy will not be a major factor for gold. Geopolitical uncertainty will be an important driver for the price," said Kirill Kirilenko, senior precious metals analyst at CRU. "Safe-haven demand should be good for gold and silver in 2024."

Like  silver, the gold market has built a solid base well above last year’s prices. During the 2022 LBMA conference, gold was trading at around $1,650 an ounce.  

Along with safe-haven demand, analysts note that the yellow metal continues to be well supported by central bank demand, which hit a record high in the first half of 2023.

Conference participants are also bullish on platinum, with prices expected to hit $1,153.70 an ounce next year, according to the LBMA survey.

Platinum continues to struggle at around $900 an ounce; however, dwindling supplies, growing industrial demand and the burgeoning Green Hydrogen economy are expected to support the precious metal.

Some analysts at the conference noted that platinum is a critical metal used in hydrogen fuel cell technology, which is seen as an alternative for battery electric vehicles.

Platinum can also be used in proton exchange membrane (PEM) electrolyzers, which are used to separate water into hydrogen and oxygen molecules.

Finally, the survey showed that participants expect palladium prices to trade around $1,221.60 an ounce by the next 12 months.

The palladium market continues to struggle as it does not have the same bullish demand outlook as platinum as part of the green energy transition. However, analysts note, in the near term, falling supply and consistent demand will continue to support prices.

 

 

Neils Christensen has a diploma in journalism from Lethbridge College and has more than a decade of reporting experience working for news organizations throughout Canada. His experiences include covering territorial and federal politics in Nunavut, Canada. He has worked exclusively within the financial sector since 2007, when he started with the Canadian Economic Press. Neils can be contacted at: 1 866 925 4826 ext. 1526 nchristensen at kitco.com @Neils_c

 

www.kitco.com