GOLD AND SILVER AT ALL-TIME HIGHS

In 2024, we have witnessed a remarkable increase in the prices of gold and silver, with increases of close to 30% and 25% respectively compared to previous years, where gold usually rises by 11% annually and silver had remained sideways since 2021. This phenomenon is not accidental and responds to several global factors. In this article, we will explore the main reasons behind this increase and how current events such as war conflicts and economic decisions by the Federal Reserve (FED) have influenced these market movements.

 

Historically, gold and silver have been considered safe haven assets in times of economic and geopolitical uncertainty. In crisis situations, investors tend to move away from risky assets such as stocks and lean towards these precious metals to protect their capital.

 

 

Russian-Ukrainian War: This conflict, which has been going on for more than two years, has created great instability in European markets, affecting energy prices and supplies, generating distrust in the global economy. The fear of an escalation or further disruption in energy supplies has pushed many investors towards gold and silver as ways to preserve value.

 

Israeli-Palestinian Conflict: This conflict has taken on a new dimension in 2024, raising concerns about stability in a crucial region for the global economy. Although the immediate economic effects have been less global than the Russian-Ukrainian conflict, fear of a possible expansion and its impact on energy markets has also contributed to the increase in demand for precious metals.

 

 

Another important factor that has driven gold and silver prices has been the monetary policy of the United States Federal Reserve (FED). Since September, the Fed has implemented interest rate cuts, after long periods of rate hikes to prevent a major financial crisis and counter inflation.

 

When interest rates fall or the Fed tightens its policies, the dollar tends to weaken, making gold and silver more attractive to foreign investors. In addition, low yields on bonds and other traditional assets have led investors to seek safe havens, such as precious metals, to diversify their portfolios.

 

 

Although inflation rates have begun to moderate in some economies, they remain a persistent problem in many parts of the world. Inflation reduces the purchasing power of traditional currencies, which has driven increased demand by Central Banks, as these metals have proven to be a reliable hedge against inflation throughout history.

 

This analysis provides a clear picture of why gold and silver have risen significantly in 2024, highlighting the key role of geopolitical conflicts and monetary policies. If you are looking to sell or buy gold, it is essential to understand these factors to make informed decisions.