Welcome to SurvivalBlog’s Precious Metals Month in Review, where we take a look at “the month that was” in precious metals. Each month, we cover gold’s performance and silver’s performance and examine the factors that affected metal prices.
WHAT DID GOLD AND SILVER DO IN DECEMBER?
Despite enjoying a terrific annual performance, the precious metals fared poorly to close out the year. Gold ended the month down 1% while silver endured another monthly loss in excess of 5%.
The metals started the month trending lower: on Dec. 2nd, spot gold fell about 0.5% to $2,636 per troy ounce, and silver prices slipped 13 cents lower to $30.47 per oz. Silver rose 78 cents over the course of Dec. 3rd and 4th, and then jumped another 88 cents on Dec. 9th to reach its high point for the month at $31.85/oz.
Amid a streak of seven consecutive losing days, silver slumped 4% into the red during trading on Dec.18th. The gold price lost $65 on the same day (-2.4%) to fall as low as $2,580/oz. There was a brief rebound on Dec. 20th, with silver rallying 1.55% higher and gold adding more than 1% on the day.
The week of Christmas saw both metals drift lower but by small increments. Following the holidays, gold fell somewhat sharply on Dec. 30th as it again tested the $2,600 level. To close out trading for 2024, gold settled around $2,620/oz and silver held near $28.80/oz on New Year’s Eve.
FACTORS AFFECTING GOLD AND SILVER THIS MONTH
Although not always the case, December tends to be seasonally slow for silver gold. Investors are usually focused on improving their year-end tax efficiency through, resulting in lower prices. The metals have also lost some momentum as the heaviest buying for festival season in India has already passed.
The biggest downward move that occurred on Dec. 18th came in the wake of the Fed meeting. The FOMC cut interest rates for the third consecutive time, bringing rates down by a full 1% in total. The market reaction was fairly unexpected: the U.S. dollar continued its trend higher against foreign currencies and Treasury yields spiked higher. Comments by Fed Chair Jerome Powell after the decision framed the rate cut as hawkish, with Powell signaling that the central bank may pause on future reductions to the federal funds rate.
This shift toward more neutral monetary policy knocked some of the luster off of the metals. Nonetheless, the downside for silver and gold remained limited due to the deteriorating geopolitical landscape. The Assad government in Syria fell; a coup attempt in South Korea failed, leading to the president being impeached; governing coalitions collapsed in both France and Canada; tensions rose at the Pakistan border with Afghanistan, a country now controlled by the Taliban; and Russia swiftly rejected President Trump’s peace proposal in Ukraine. In addition to all of that, a terrorist attack rocked a busy market in Germany just before Christmas when the culprit plowed a car into the crowd.
It stands to reason that gold prices will continue to react favorably to instances of global turmoil—but silver less so.
CENTRAL BANK GOLD PURCHASES
Note to readers: Most data about international gold reserves are delayed by a month. They are not typically reported to the International Monetary Fund (IMF) and are instead compiled by private organizations such as the World Gold Council (WGC).
Overall, central banks globally are on track to increase their gold stockpiles by a staggering 900 tons in 2024, compared to an annual average of about 325 tons over the past decade.
The National Bank of Poland bought 21 tons of gold in November. It’s the eighth straight month of purchases, increasing their reserves by 90 tons year-to-date.
The Czech National Bank bought 1.6 tons of gold in November, the 21st straight month it has done so.
Uzbekistan added 9 tons of gold to its reserves in November
IMF data show the National Bank of Georgia purchased 7 tons of gold between March and April. (It had zero gold reserves prior to this.)
The National Bank of Kazakhstan increased its gold reserves by 5 tons, erasing its previous sales this year. Kazakhstan holds 295 tons of gold in total.</
The People’s Bank of China announced it will buy gold again, supposedly for the first time in 6 months. The PBoC added 5 tons of gold in November (but neglected to report 60 tons purchased in September).
Syria is retaining its 26 tons of gold reserves after the ouster of Assad.
The Reserve Bank of India revised its October gold-buying down from 27 tons to 14 tons.
The central bank of Finland sold 5 tons of its gold in order to buy more forex reserves of U.S. dollars, British pounds, and Japanese yen.
Indonesia is reportedly considering the establishment of its own national bullion bank.
ON THE RETAIL FRONT
Unfortunately, the United States Mint hasn’t updated its sales numbers since late November. We can nonetheless assume that the totals weren’t zero during December.
January almost invariably sees the highest monthly orders for silver bullion from the mint. With the exception of 2020, January has been the best-selling month for American Silver Eagle coins every year going back to at least 2013.
In other news, the Office of the Inspector General (OIG) released a report questioning the source of U.S. Mint gold
According to the 1985 law that authorized the mint’s bullion coin programs, all gold coins produced by the mint must be made entirely of gold that comes from domestic mines.
MARKET BUZZ
India’s commerce ministry revealed it may have overestimated the surge in gold imports during November that caused a record-high trade deficit.
Thin layers of gold plating could be a key component in the future of quantum computing
The Shenzhen gold market in southern China saw a surge in gold consumption, increasing 40% in the fourth quarter compared to the previous three months.
The gold trading bourse in Hong Kong, founded in 1910, will restructure to become the Hong Kong Gold Exchange.
Chinese customs data show high imports of silver concentrate. The solar panel industry alone is estimated to have consumed 6,000 tons of silver in 2024.
The U.S. Treasury Department claims it suffered a security breach by a state-sponsored Chinese hacker
PAMP Suisse gold bars will begin to be stamped with QR codes for better tracking and security.
Silver premiums in the retail market hit their lowest in over four years.
Gold and silver could become the official currency of Florida, according to the state’s CFO.
CME Group, which runs the COMEX, plans to offer 1-ounce gold futures contracts for the first time. Until now the standard size offered has only been 100 oz.
A Chinese mining company reportedly discovered the world’s largest gold deposit, estimated to be worth $80 billion.
El Salvador may consider restarting gold mining in order to kickstart its economy.
Senator Lummis wants the U.S. government to start a Strategic Bitcoin Reserve funded by revaluing gold certificates
Market Predictions
Here’s a rundown of what Wall Street is forecasting for the precious metals:
- Citi remains bullish on gold in 2025, with a target of $3,000/oz.
- Analysts at Bank of America see gold at $3,000/oz in 2025.
- Goldman Sachs envisions multiple bullish scenarios for gold in 2025, reiterating its call for prices to exceed $3,000/oz next year.
- UBS is bullish on silver in its annual report, expecting prices to reach $38/oz in 2025.
- CIBC analysts predict gold will fare well under the incoming Trump administration.
- German refiner Heraeus forecasts gold to trade as high as $2,950/oz in 2025.
LOOKING AHEAD TO NEXT MONTH
With 2024 in the rear-view mirror, gold has shown some similar price patterns to 2007 a pivotal year for the financial sector and the beginning of a multiyear bull run for gold and especially silver.
Historically, January tends to be the best month of the year for the gold price.
The Chinese Lunar New Year starts in late January and is always a huge event for gold-buying.
The metals markets will no doubt be watching the fight in Washington over government spending and the debt ceiling as President Trump takes office. It’s also worth noting that credit card delinquencies in the U.S. are currently at a 14-year high.
Compelling reasons abound for both precious metals to enjoy another solid year of gains in 2025. – Everett Millman of Gainesville Coins.