Precious Metals Report 2024/04
In 2024, gold achieved something that only AI values and Bitcoin had recently achieved: it reached a new record value of more than US$ 2,200 per ounce. Despite all the wars, crises and disasters, the high interest rates charged by global central banks weighed on the gold price. After all, gold is a metal that does not yield any interest and why invest in gold when you can get 4% interest or more on an overnight or fixed-term deposit account? Paradoxically, it was the central banks themselves that bought gold as if there was no tomorrow. Nevertheless, the best is yet to come for gold: the expected interest rate cuts by global central banks, above all the Fed and the ECB, which will soon be forced to cut their key interest rates to a much lower level in view of the continuing sharp rise in debt and falling inflation rates.
Although silver in physical form is also an investment vehicle, it is primarily a metal that is used in more than half of the demand in industry - and the trend is rising sharply! Several unsurpassed properties make silver a sought-after conductor material, which is why demand from the booming electromobility, photovoltaics and 5G transmission sectors has recently exploded, catapulting demand to an all-time high. At the same time, silver production has stagnated and recently even declined. This has led to ever-increasing supply deficits in recent years, which reached record levels in 2022 and 2023 and will also be very high in 2024.
Platinum is an industrial metal with a small share of demand from the jewelry industry and the investment sector. The almost exclusive use of platinum in catalytic converters for diesel burners, the production of which has declined in recent years, has led to a fall in demand for platinum, which has weighed heavily on the platinum price. A clearly discernible weakening of demand for electric vehicles, an additional decline in recycling and a drop in platinum production led to a major supply deficit recently.
Palladium has recently suffered a similar fate to platinum - the price has fallen, collapsing from a record level. Like platinum, palladium is also largely used in catalytic converters for combustion engines, but palladium is used in gasoline-powered vehicles. Here too, a dip in demand for expensive e-vehicles and a decline in recycling due to fewer returns provided the palladium price with a little tailwind and at least helped to stabilize the price.
