Most people realize that gold and silver had a pretty good year in 2024. But just how good was it?
In this episode of the Money Metals' Midweek Memo, host Mike Maharrey gives an overview of gold and silver's performance last year and highlights some of the factors that drove the markets. He also looks ahead to what might be in store for 2025.
Mike opens the show with an analogy.
"If you’re a runner, or maybe played another sport, I don’t know, maybe golf, you’ve probably had the experience where you were in the middle of a race or game and thought, 'Man, I’m doing pretty good here.' You just felt right. You knew that it was a good race or a good game as it was happening. And then when you get to the finish line, your time was even better than you expected. Your score was better than you thought. It’s like, 'Heck yeah! I knew I felt good, but I didn’t realize I felt THAT good.
"That’s kind of how I feel about gold’s year in 2024. I knew it was good, but in retrospect, it was even better than I realized."
How good was gold's performance?
Mike digs into the numbers, pointing out that gold's percentage gain was 26.5 percent. He also highlights some other impressive data and points out that gold's performance came despite some headwinds.
"That was gold’s price performance last year. I’m probably not telling you anything you didn’t already know. The real surprise is how well gold did compared to other assets."
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In fact, the yellow metal edged out U.S. stocks to rank first among traditional asset classes.
So, why did gold have such a good year?
Mike highlights a number of factors including sticky price inflation, the promise of Federal Reserve monetary easing, central bank gold buying, and geopolitical turmoil.
"There were a lot of factors driving gold forward. But it was by no means a perfect storm. There were plenty of headwinds. And yet gold still did better than every other asset!"
Mike also touched on silver's 2024 performance.
"Since it has remained well below its all-time high even as gold set multiple records, a lot of people have the impression silver underperformed. But objectively, it did pretty well."
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Mike shares some of the data, noting that while it didn't do as well as stocks, silver generally outperformed most other asset classes.
He also notes that there are several indications that silver is underpriced, including the supply and demand dynamics, along with the elevated gold-silver ratio.
"I’ve said this before, but I think that now is a great buying opportunity for silver."
Summing things up, gold had a great year. Silver had a pretty good year too. What can we expect in 2025?
"Well, I don’t have a crystal ball, but I think we can expect the bull run to continue. I say this because all of the factors I mentioned that drove gold higher last year are still in place. Central banks show no sign of ending their buying spree. Inflation is still sticky. The Fed is still going to cut. There are still plenty of geopolitical tensions."
Mike advises listeners to pay close attention to the Federal Reserve.
"Powell and Company are trying to convince you they aren’t going to cut as fast. The projection now is for two cuts this year. But I think this is posturing. I think they’ll cut more because they have to. There is too much debt in this bubble economy to keep rates high. I’m convinced that’s why they’re cutting in the first place because if you just go by the inflation data, they should be holding firm if not raising rates. But the economy is addicted to easy money. The drug pushers over at the Fed can’t let their junkie go into withdrawals. And they won’t. I think you’ll see more than two cuts."
Mike notes that he's not alone in expecting gold's bull run to continue.
"Most mainstream analysts seem to be pretty bullish on precious metals. And it's important to note that Wall Street analysts generally think the economy is gliding to a soft landing. They don't anticipate any kind of economic crisis in the coming year, and they expect the Federal Reserve will move forward with rate cuts at a relatively modest pace. Any kind of economic upheaval would drastically change the calculus of gold. If the economy breaks under the pressure of higher interest rates, and if the Fed speeds up the pace of rate cuts, gold would get an even bigger boost."
Mike closes the show with a call to action.
"It’s a new year. It’s a time for resolutions. Maybe you’ve decided to get your financial house in order. Gold and silver should be part of the plan. But if you’re like a lot of people right now, you are already having a hard time making ends meet with prices going up seemingly every day. You might be thinking, I don’t have thousands of dollars to buy gold. Well, Money Metals has a great program where you can buy gold a little at a time. You can do it for as little as $100 a month with our monthly purchase plan. Call 800-800-1865 for more information."
There's more information on our monthly purchase plan HERE.
Articles Mentioned During the Show
Gold's Role as an Inflation Hedge in the 21st Century
How Has Russia Used Gold to Support Its Wartime Economy?
The Next Phase of the Gold Bull Market Could Be Starting Soon
About the Author
Mike Maharrey is a journalist and market analyst for MoneyMetals.com with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
