Gold Just Hit $2700...But SILVER Has Outpaced This Year

Summary

In this discussion, Alan Hibbard, a precious metals and alternative money specialist from GoldSilver.com, shares insights on the current market trends. He highlights the volatility in equities, gold, silver, and Bitcoin, noting that while equity markets are at all-time highs, many investors are shifting to gold, silver, and Bitcoin for protection. Hibbard emphasizes the long-term bullish trends in gold and silver, driven by central bank buying and industrial demand. He also discusses Bitcoin's volatility, predicting more interest from larger investors. Overall, the conversation centers on diversifying investments amid economic uncertainty.

Takeaways

• 📈 The equity market is at or near all-time highs, and there is a risk-on sentiment, but many investors are shifting to risk-off assets like gold, silver, and Bitcoin.
• 🪙 Central banks have been steadily buying gold since 2015, marking a shift from 35 years of being net sellers, which reflects a multigenerational trend in gold investments.
• 💰 Despite fluctuating interest rates, gold prices have been consistently rising over the last nine years, signaling a different market dynamic.
• 📉 Gold has already risen over 30% this year, driven by both central bank buying and retail investors, indicating strong demand for the precious metal.
• 🔮 Gold is attractive not only as a hedge but also for price appreciation, with expectations that it will outperform other assets like equities in the coming years.
• 🥈 Silver is currently at an 11-year high and has outperformed gold in 2024, with a 34% increase versus gold's 30% rise.
• 🏭 The demand for silver, driven by its industrial applications in sectors like electric vehicles and consumer electronics, has outpaced supply, contributing to the price increase.
• 📊 Copper has also seen a recovery after a summer slump, supported by industrial demand, with stimulus measures from China potentially affecting prices.
• 💻 Bitcoin has had a volatile year, but it is still up 48% year-to-date. It is increasingly seen as a digital form of gold and is expected to attract larger investments over time.
• 🗳️ The upcoming U.S. election may introduce additional volatility to Bitcoin, as both candidates appear supportive, potentially influencing its future price.

Q & A

What is the current state of the equity market, according to Allan Hiard?

The equity market is at or near all-time highs, with a 'risk on' mode. However, Allan Hiard emphasizes that many investors are turning to 'risk off' modes by investing in gold, silver, and Bitcoin due to volatility and uncertainty.

How does Allan Hiard describe the difference between current investors?

Allan describes two types of investors: those in 'risk on' mode, continuing to invest in equities, and those in 'risk off' mode, seeking to buy physical assets like gold, silver, and Bitcoin to hedge against market volatility.

What makes the current gold market different from historical patterns?

The current gold market differs because central banks have been net buyers since 2015, a shift after 35 years of being net sellers. This ongoing buying, despite changes in interest rates, has created a stable bull market in gold.

Why does Allan believe gold remains attractive despite recent gains?

Allan believes gold remains attractive both as a hedge and for price appreciation. He mentions the Dow-gold ratio, which suggests gold could outperform equities over the coming years, making it appealing even after its recent rally.

What is the significance of silver in the current market?

Silver has outperformed gold this year, up 34% compared to gold's 30%. Despite being at 11-year highs, it is still below its all-time high of around $50 per ounce. Silver's industrial demand, especially in electronics and renewable energy, continues to drive its price.

How does industrial demand impact silver prices?

Industrial demand for silver, particularly in electric vehicles, consumer electronics, and photovoltaics, has created a structural deficit, with demand outpacing supply. This is a major factor driving silver prices upward.

What role does Bitcoin play in the market, according to Allan?

Allan views Bitcoin as 'digital gold' and emphasizes that it represents sound money. Although volatile, Bitcoin has gained 48% this year. Investors are gradually realizing its value as a stable store of wealth, similar to gold.

What potential factors could influence Bitcoin's future price movements?

Allan mentions that the upcoming election may add volatility to Bitcoin. Both political candidates are somewhat supportive of Bitcoin, which could lead to more bullish sentiment and potentially increase its price.

How does the performance of copper compare to silver in the current market?

Copper, like silver, has seen strong performance in recent weeks after a summer slide. Allan suggests that both metals are benefitting from stimulus efforts, particularly in China, although the US economy is showing robust 3% GDP growth.

What long-term trends does Allan foresee in the precious metals market?

Allan predicts that both gold and silver will continue to rise, driven by central bank purchases, industrial demand, and economic uncertainty. He expects silver to remain particularly attractive due to its industrial uses and the ongoing supply deficit.