(Kitco News) - After posting its' second consecutive weekly drop last week, gold has rebounded. Strengthening expectations for an interest rate cut at the Federal Reserve’s meeting next week are boosting prices, after the last rate cut was overshadowed by the post-election churn. The Chinese central bank resuming gold purchases after a six-month pause has also caught investor attention.
The floor under gold prices was also upheld by an increase in geopolitical risk over the weekend, as Syrian President Bashar al-Assad fled to Russia while rebels seized the capital. Syrian citizens are hopeful but uncertain about the development, following 13 years of civil war and more than 50 years of brutal rule under the Assad family regime.
Gold spot prices dropped 2.5% last month after rising 3.4% in October and gaining 5.2% in September. The rebound in gold this week should lift spot prices, but meeting resistance at the $2,675 – $2,685 per oz. level, it is unlikely that gold will see another breakout before the end of 2024. Gold is up 28% in 2024.
Meanwhile, silver has also rebounded this week. Silver fell 5.2% in November after advancing 4.3% in October and rallying 7.9% in September. It’s up 31% in 2024.
Above 80, climbing towards 85, the current gold-silver ratio (GSR) shows how undervalued both metals currently are, particularly silver. Typically, the GSR responds to extreme highs by correcting downward, with silver outpacing gold as both gold and silver prices rise. Gold is anticipated to continue breaking records over the next couple of years. So, the slower holiday trading season makes now the perfect time to buy gold and silver at these price levels before markets pick back up in 2025.
How have the other metals in the precious metals complex performed? The spectacular increase in the price of palladium, which peaked above $3,400 in March of 2022, attracted widespread interest from investors and highlighted the importance of understanding the palladium market when considering an investment in palladium or platinum. Palladium prices have since plummeted while platinum has moved marginally lower.
Platinum currently sits around $950 an oz., while palladium rests just under $1,000. Like gold and silver, platinum and palladium saw a boost in September and October, followed by a pullback in November. Platinum is down 6.4% and palladium is down 13% in 2024.
Whether you invest in precious metals as wealth insurance, for profit potential, or to diversify your portfolio, this slower trading season creates an excellent opportunity to strengthen your portfolio position. In the last bull market, gold and silver’s upward momentum gave palladium and platinum a strong boost. The precious metals markets are impossible to time, but where gold goes, all precious metals follow, and the bull market is set to continue into 2025 and beyond.
