Gold rose and silver rose moderately in quiet trading during Christmas week. In early morning European trading today, spot gold was $2627, up $34 from last Friday’s close and silver at $29.70 was up 20 cents. Close examination of price timelines during the week showed a tendency for both metals to rise modestly during Asian trading hours, with a loss of direction in European and American hours. This suggests that Asians are still quietly accumulating physical bullion if it becomes available over the Christian holiday season.
One surprise is that option expiry for Comex January contracts passed with barely a ripple. The explanation surely is that the decline in prices during December conveniently made calls with strikes above $2600 for gold and $29.50 for silver worthless, benefiting establishment sellers. This pressure is now behind us and all else being equal we can reasonably expect prices to rebound in January.
For the record, gold rose 26.5% and silver 25.25% since 1 January, which compares with the S&P 500 Index which rose 26.6%. These are the comparisons likely to be made by investment allocators, who will probably conclude dismissively that there was little advantage in increasing allocations towards precious metals. That could turn out to be complacent with respect to 2025.
2024 saw record stand-for-deliveries in both metals. In gold, 485.5 tonnes were stood for delivery of which nearly 80 tonnes have been since Thanksgiving. In silver, these figures are 6,378 tonnes, and 1,410 tonnes respectively. They are enormous numbers and the acceleration of deliveries in the last month is simply staggering. Furthermore, this doesn’t include Exchange for Physical numbers which are far larger, some of which would have involved taking delivery in London and shipping physical metal on to Asia.
Withdrawals of gold by the public from the Shanghai Gold Exchange vaults in the first eleven months of 2024 totalled 1,333.7 tonnes, predominantly supplying the jewellery trade. This is almost 40% of expected global mine output over the same period. Crucially, this does not include gold accumulated by the state and its central bank. Nor does it include additional gold acquired by banks and institutions choosing not to take delivery from SGE vaults. Increases in this hidden total back gold accounts and other Chinese investment media.
Prospects for 2025
Keep reading with a 7-day free trial
Subscribe to MacleodFinance Substack to keep reading this post and get 7 days of free access to the full post archives.