2024 Precious Metals Recap & 2025 Forecast: What to Expect in the Gold, Silver & Crypto Markets

Michael Carabini: Hello folks, thanks for joining us. I’m Michael Carabini, and I’ve been in the Monex group of companies for five decades, and have had different roles, but this is the first time I’ve been invited here, and I’m very excited. What’s weighing on my mind, which I think is weighing on a lot of investors’ minds, is everybody recognizes that next year we’re going to see big changes, almost like a sea change, but what do we expect? What does that mean for investors? What does it mean for their investments?

So here we have an expert, Jeffrey Christian, to tell us what his views are looking forward in the context of 2024, and a wrap up, what we’ve seen this year, and what to expect or what to be concerned of for next year.

Jeffrey Christian:It’s great to see you again, it’s been a long time, Michael, and good to have you in the hot seat.

Michael Carabini: Thank you, Jeffrey.

Jeffrey Christian: Talking about 2024, the title of Monex’s work with CPM this year was, Precious Metals in a Rising Storm, and we saw a…, we had expected, and we’ve seen over the course of this year, significant risks and uncertainties in the political environment, in the economic environment, and in the financial market, and investors have looked at those risks and the uncertainty as to where it’s going to go, and they bought gold and silver. Gold prices yesterday, at yesterday’s close, gold was up 30% from where it had been at the end of 2023. Silver was up 34%. That represented large increases in investors buying physical gold and silver around the world, based on that uncertainty.

Going forward, you’re spot on in terms of the idea of a sea change going on. The problem is we don’t know what that sea change is going to be. Now, if you, the President-Elect Trump and his people have said a lot of things since the election day and even before the election day, and you can pick and choose what you want to believe, and the big question is going to be, what are they going to try to do? And what are they going to succeed in doing? Because you can find things that they’ve said that would suggest that they can stimulate the economy further. You saw $7 trillion of additional debt added in the first Trump administration, and some of the things they’re talking about could be very stimulative of the economy, and we could see the current economic expansion, which has surprised a lot of people over the last several years for being as strong and long as it has been. You could see that some of the things that Trump is talking about doing could extend the economic expansion. That’s good for gold and silver, because when you expand the economic expansion and when you extend it, it tends to push stock prices higher, and the higher stock prices go, the wealthier people are and the more nervous they are that that stock market is going to stop increasing and maybe fall sharply. So, you tend to see investors buying more gold and silver in that kind of economic environment, but you can also listen to some of the things that Trump and his people are saying and say, these things could be negative for the economy, and they could throw us into a deeper recession sooner than we might otherwise expect. The ironic thing is that’s good for gold too, because when you start seeing the cracks in the economic system and the financial market, investors tend to buy more gold and silver.

So, our expectation is that the Trump administration is going to be very important. It’s going to radically change the way the US works and the way the world works. It’s not alone, there are other agents and actors in this play, but it’s got a dominant role, and it’s going to cause a lot of uncertainty, because whatever comes, it will be radically different from what has been happening over the last several decades really. So, our expectation is that gold and silver prices, investors will continue to buy gold and silver at very high historic levels, and that will push gold and silver prices higher over the course of 2025.

Michael Carabini:You know, Jeffrey, when you’re talking about radical change and maybe greater than the last couple of decades, I think you’ve spoken about gold and there’s some opportunity there, but can you speak to radical change and in the context of does that mean increased volatility, possibly for gold, which is, I guess that’s what we’ve seen this year, and also for other assets like precious metals and even cryptocurrencies?

Jeffrey Christian: I think that volatility in asset values is going to be continuing to be very high. It will be high in gold and silver. It’ll be high in stocks and corporate bonds. Interest rate uncertainty, we’re going to see what the Fed does next week. There are economic indicators that suggest that it might pause in its interest rate declines. Right now, it looks like next week we’ll see another 25 basis points that decline, but you’re going to have increased uncertainty and that’s going to lead investors to waffle back and forth. That’s going to increase asset value volatility.

In terms of cryptos, they have been very volatile. They will continue to be volatile. If you think about gold, monthly gold price volatility is about 10 to 20% typically. Sometimes it spikes up, sometimes it goes down. Bitcoin’s volatility is 50 to 100%. That’s a gamble. That’s a big gamble.

If you’re a portfolio manager or if you’re an individual investor and you’re looking at what can I add to my portfolio, to my retirement accounts that will smooth things out. Gold with a 10 or 20% volatility does that and it has for the last 50 years.

Michael Carabini: That’s what we need to focus in on. Could you speak further on that, because that’s, I think, what I see is the potential opportunity for investors to think about in 2025 is using gold and silver in their unique role as diversification in a portfolio, whether it be just stocks or even a portfolio that has crypto coins. Can you speak to the benefits of gold and silver in that context?

Jeffrey Christian: Most of our work that we do calculating what’s the beneficial aspect of adding gold and silver to your portfolio, we use a standard portfolio that’s stocks and bonds. Gold and silver both reduce the risk and increase the returns historically since 1968, 1970, having 10, 20, even 25% of your assets in gold and silver have increased your returns and reduced your risk for gold. It’s increased your returns more than it’s increased your risk with silver. When you add cryptos into that portfolio, the portfolio becomes even riskier, because of the volatility of the cryptos. Then when you calculate adding gold to a diversified portfolio that includes cryptos, gold or silver, you find that the benefits of having gold and silver in a diversified portfolio that includes cryptocurrencies is even greater than it is for a portfolio that doesn’t have cryptos, because the cryptos add volatility and gold and silver take it away.

Michael Carabini: You know, Jeffrey, that’s a very important point that I don’t think people are aware of, and I really hadn’t thought it all the way through, but what you’re saying is next year, we’re expecting radical changes. Everyone I think is aware of the benefits and the properties of gold and silver in a portfolio, but even those that have crypto could even find a greater use or utility in their own personal cases to look to gold and silver in a portfolio. I think that’s really exciting that something that I’m pleased to share and happy to have you here to have those insights.

Is there any other things that when we’re trying to close here that you’d like to bring up?

Jeffrey Christian: Yeah, I think that’s the single most important takeaway that we can give your clients going into 2025. I think there’s going to be a lot of changes. There will be a lot of surprises. There’ll be a lot of things that will not happen, and there will be a lot of things that will happen, and some of those factors may reduce world tensions and cause gold and silver to come down a little bit at times, but I think by and large, we’re still in the middle of a large political and economic storm, and I think there are more bad things that could happen than good things, unfortunately, in 2025.

Michael Carabini: Jeffrey, thank you so much. It’s been a great pleasure. Jeffrey, thank you for inviting me on your program here, and it’s a great honor to be here with you today.

I’d like to thank everybody for staying tuned with our program and wish you the best this year, as we end it, and in next year.