Q2-24 Gold & Silver Trends In North America

Market Overview of Precious Metals

Gold Price: Gold is currently trading around $2,310 as investors are awaiting US inflation data, for indications on the timing of potential US rate cuts. Despite high prices, gold demand remains resilient, with heavy gold items continuing to sell well and 14-carat gold remaining dominant over cheaper alternatives. This has led to increased selling back by investors driven by profit-taking and fears of a price correction.

Silver: Silver prices in India are currently being traded at a $1.1/oz discount to the landed cost due to subdued local demand. On the global front, silver prices remain stable above $30 per ounce. Despite these high prices, industrial demand for silver is surging, indicating strong investment potential. Additionally, the demand for silver jewellery has increased as it is more affordable compared to gold, prompting some consumers to switch from gold to silver jewellery. Consequently, silver remains a good investment due to its industrial applications and the shift in consumer preferences.

Platinum: Canadian tax credits for hydrogen projects could boost demand, with refunds between 15%-40% on project expenses.

Palladium: Record high net short positions on NYMEX (New York Mercantile Exchange), indicating significant market volatility.

Why It Matters: Investors should note that despite high prices and market volatility, demand for gold, silver, platinum, and palladium remains robust due to their industrial applications, investment potential, and shifting consumer preferences.

Recycling Gold & Silver Trends

Gold Recycling: Modest year-on-year (y/y) gains in North America. The strong job market and stable housing market have limited the need to liquidate gold assets, resulting in only a modest increase in recycling despite high prices.

Silver Recycling: Significant increase, especially in old silverware and coins, driven by high prices. This includes old commemorative coins and old circulating coins. Industrial recycling, however, remains minimally impacted.

Why It Matters: Understanding recycling trends helps you grasp the supply side of the market, which influences the availability and prices of gold and silver.

Retail Investment

Gold Investment: The spike in gold prices has led to a surge in selling back by investors, including profit-taking and fear of a near-term price correction. New investments are weak, affected by economic pressures and previous large purchases during 2020-23.

Silver Investment: Similar trends to gold, with significant sell-backs at high prices. However, net demand for silver remains positive, particularly in Individual Retirement Accounts (IRAs), which show steady growth with minimal liquidations.

Why It Matters: This section provides insight into the behavior of retail investors, helping you understand market sentiment and potential investment opportunities.

How This Helps You

Understanding that gold prices are currently high but may stabilise can help you decide the best time to buy. Recognising the strong industrial demand for silver and its affordability compared to gold can guide you towards potential silver investments.

Awareness of recycling trends helps you understand the supply side of the market, influencing availability and prices. Additionally, insight into global economic factors, such as US inflation data and Canadian policies, provides a broader perspective on market influences.