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Gold & Silver Continue to Hit Highs

Published May 30, 2024 | 2 min read

By Louis Golino

Spot gold and silver prices have had quite a run this spring. On May 24, gold hit a new all-time high above $2,450 an ounce. Most metal analysts expect prices to continue rising in the coming months and years.

Silver Is Up

Silver, which reached an all-time high of $50 an ounce in 1980 and 2011, is also in a bullish trend. It recently hit an 11-year high above $32 an ounce. 

Some experts have long viewed silver as undervalued and potentially reaching $100 or more an ounce in the future. The main reason is a large deficit of silver because so much of it is used for solar energy and electric vehicles. This differs from gold, which is recycled. 

A Sure Thing

These developments, especially gold’s stellar run, vindicate longtime metals bulls like Dennis Gartman and James Rickards. They have argued for years—even decades in some cases—that gold was headed to $3,000 an ounce and higher. The reasons cited most often were the rise in the federal debt and concerns about inflation due to the quantitative easing program that followed the Great Recession of 2007-08.

Gold at $3,000 or higher is now widely seen as within reach in the coming years and possibly sometime next year following the 2024 presidential election. According to Kitco News, asset management firm UBS analysts recently projected that gold will reach $2,600 by the end of the year and $2,700 by June 2025.

Gold at $3,000 or higher is now within reach in the coming years and possibly following the 2024 presidential election.

Gold’s Drivers

Strong demand, especially from Chinese and Indian buyers, is the primary cause of gold’s current bull run. In recent years, Eastern gold buyers have outpaced Western investors. At the same time, average Americans who have never bought precious metals have been flocking to Costco this year to buy gold bars, and the company has struggled to keep them in stock.

Central-bank buying is a second factor pushing gold up in recent years. Firms like the People’s Bank of China have diversified their assets by reducing the number of dollars they hold. That trend has only accelerated in the wake of U.S.-led sanctions against Russia. This has led many governments worldwide to move more assets into gold since it can’t be confiscated.

A third major factor pushing prices up is the U.S. Federal Reserve Bank’s interest-rate cuts expected later this year or next. Although market analysts are now more cautious about when cuts will begin, most still expect them to begin sometime after the election. Lower rates make gold more attractive for investors by reducing the opportunity costs of holding gold compared to other assets.

Finally, rising geopolitical uncertainty and economic turbulence have also increased demand for gold, especially as a safe-haven asset.

Impact on Coins

Higher silver and gold prices and a strong bullion market are positive developments for the numismatic hobby. That’s because collectors and dealers often put the profits from selling bullion into collector pieces. Plus, new bullion investors often become interested in coins. However, at some point, higher silver and gold prices are likely to negatively impact the hobby.