Insights

2024 has been an exciting year thus far for precious metals and critical materials. This webcast takes a technical perspective on the key drivers for gold, silver, uranium and copper, as all four metals enjoy positive markets. We also provide strategic portfolio allocation ideas for precious metals and critical materials.

Gold has surged above the psychological $2,500 level, driven by factors not easily explained by traditional market variables, suggesting possible central bank or sovereign activity rather than usual market dynamics.

Gold gained 12.79% YTD by June 30, supported by central bank buying. Silver closed Q2 at $29.14, boosted by gold's breakout and global monetary expansion.

Gold reached an all-time closing high and is up 8.09% YTD (as of 3/31/2024) after rising 13.10% in 2023. We believe several factors are in place for gold to move higher, such as strong central bank buying. 

What forces are likely to drive energy transition materials and precious metals markets in 2024 and over the next decade? We discuss 10 critical macroeconomic and market-specific themes.

On Friday, December 1, 2023, spot gold bullion registered an all-time high closing price of $2,072.22, surpassing the prior closing high of $2,063.54 reached on August 6, 2023.

Gold demand from sovereigns and central banks remains unwavering. Over the past decade, China has been committed to bolstering its gold reserves to enhance its economic and geopolitical standings. 

Central banks and investment funds were the main players shaping the gold market in the first half of the year. Gold is reverting to its historical role as a significant reserve asset as central banks seek to diversify amid geopolitical uncertainties.

Gold attempted to breakout above $2,050 in early May before drifting lower as the U.S. debt-ceiling drama deepened and the U.S. dollar strengthened. At the same time, global central banks have been accumulating gold at a record pace. 

The gold market continues to be bullish as the probability of a recession rises, regional banking stress resurfaces and the Fed seems determined " get inflation down to 2%, over time".

Gold posted a solid Q1 2023 gain of 7.96%, and is now up 21.38% from last autumn's low (9/26/22) following the most aggressive central bank purchases in decades and gold investment flows catalyzed by the U.S. banking crisis. 

Gold fell in February, closing the month at $1,827 in a correction characterized by a stall in buying, but not selling. Global central banks have been buying gold at record rates; more than three times their long-term averages.

January was another positive month for gold bullion. We saw strong gold buying from China, with estimated tonnes purchased at the highest level since 2017.

This year’s top 10 list offers Sprott’s thoughts on what will likely drive markets in the coming year and decade, from a macro perspective and the vantage of our asset classes: Precious Metals and Energy Transition Materials. 

Gold and gold mining equities posted strong results in November, up 8.26% and 16.79%, respectively. Silver gained 15.81%. Risk assets were catalyzed higher by the Fed's signal that it would slow the pace of rate hikes.

2022 has been a difficult year for many asset classes. Markets were historically volatile, with higher-than-expected inflation, quickly rising interest rates, the Russia-Ukraine war and the threat of a global economic recession. 

The tough year continued in October for many asset classes, including gold and other precious metals. Gold demand, however, was strong in Q3 2022 as long-term investors took advantage of lower prices to build positions.

Since Q2 2020, gold has held above $1,700 but in mid-September, a significant risk-off wave occurred, breaking nearly every risk asset lower. The primary causes were higher than expected inflation data forcing yields (especially real yields) and the USD higher, two important gold drivers.

July was another difficult month for most asset categories and was characterized by selling capitulation into exhaustion. Much more aggressive Fed rate hike expectations relative to other global central banks were a significant cause of U.S. dollar (USD) strength and rising real yields, which adversely affected gold.

Gold continued to perform as a safe haven store of value in what has been one of the most challenging six-month periods for markets in decades. Gold has managed to stay above the $1,800 support level despite the broader market carnage.

May saw selling across most asset classes and scant appetite for safe haven assets such as gold. However, gold bullion has outperformed many other asset classes YTD and continues to do its job. 

Gold held in ETFs has increased sharply this year as the safe-haven flight continues. April was tough on many investment sectors, with the S&P 500 Index down 8.80%, the Nasdaq Composite Index declining 13.37% and U.S. Treasury bonds falling 3.10%.

Gold posted its all-time highest quarterly close on March 31, 2022, ending a volatile month that helped gold climb above $2,070 on March 8. While gold may have climbed back to its highs on safe-haven flows, other positive gold supports are definitely in play.

"The Russian-Ukraine conflict is probably one of the biggest macro drivers in the marketplace... Before Russia-Ukraine, the gold market had started shaking off the hawkish Fed rhetoric. Russia-Ukraine has just amplified gold's value as a safe haven asset."

Gold bullion is up 4.36% YTD through February 28, 2022, and silver bullion has increased 4.90%. Gold mining equities rallied. Investors sought safe-haven assets given the heightened concerns over rising interest rates and the escalation of the Russia-Ukraine conflict.

Gold reached a high of $1,848 in January, but slid following the Fed's exceptionally hawkish statements at the January FOMC meeting. Market risks are rising and we believe that gold, as it did in 2018, is likely to stage a breakout given its safe haven characteristics.

Based on historic patterns, gold's lengthy consolidation indicates that prices have the potential to rally sharply and quickly in the coming year. We explain why in our List of Top 10 things to watch for gold investors.