Blanchard Index
Exclusive Precious Metals Market Outlook and Recommendations
Index updated January 1, 2025
The Blanchard Monthly Index is a roll-up of industry news and economic trends affecting the precious metals market and trading world.
Check back each month for insights and commentary from our leading experts and contributors.
The Blanchard Economic Report
A Stellar Year for Precious Metals
Gold and silver delivered extraordinary performances in 2024 as precious metals outpaced returns in most other asset classes. Gold turned in a record-setting year in 2024, jumping 27%, marking its best return in over a decade. Silver also delivered big gains last year, climbing 21% in 2024.
Precious metals are advancing in a multi-year secular bull market and gold has now climbed more than 44% over the past two years. The uptrend in gold is being fueled by many factors including aggressive central bank buying, geopolitical unrest and still-high inflation. Looking ahead, Wall Street remains positive on the outlook for metals in 2025, with the next major upside target for gold at $3,000 an ounce.
Market Performance
Gold climbed alongside a strong rally in the stock market in 2024. Lower interest rates, company earnings and artificial intelligence were key themes pushing stocks higher.
While stocks had a big party in 2024, beware of the hangover. Market volatility picked up in December and market breadth deteriorated. Looking underneath the hood of the equity market, downside leadership increased into year-end. What does this mean? It’s a warning signal that a correction or stock plunge could emerge in 2025.
It’s a reminder that investors should remain disciplined and rebalance their portfolios at this time of year. A protective wealth strategy to consider includes booking profits on stock market gains and increasing your allocation to physical gold and silver before stocks turn lower.
Inflation Higher for Longer
A key theme overhanging the U.S. economy in 2024 and into 2025 is the continuation of high inflation. The most recent Consumer Price Index revealed a 0.3% increase in inflation to an annual rate of 2.7%. Excluding food and energy, the core CPI came in at a 3.3% annual rate—well above the Federal Reserve’s target rate of 2.0%. Peering into 2025, economists expect inflation to stick around and say it could even rise further—especially if tariffs are enacted under the new presidential administration.
Fed Resets Expectations for 2025
The big news from the Fed in December were the central banker’s forecasts for 2025 rate cuts. In September, the central bank had penciled in four rate cuts next year—by year-end they expected only two—as the sticky battle against inflation continues. That is another factor that will help propel gold higher in the New Year.
Gold Seasonals Favor First Quarter Gains
If you’ve been considering increasing your allocation to gold, don’t delay as seasonal factors reveal a trend for higher prices into February. Notably, gold chalked up strong gains in the first quarter of 2017, during the first Trump Administration.
Looking Ahead
Inflation is expected to remain high in 2025 with a 3.3% CPI target, according to the Wells Fargo Investment Institute. Meanwhile, overall economic growth is expected to slow in 2025 with the gross domestic product narrowing to 2.5%. Meanwhile, the labor market is facing challenges and the unemployment rate is expected to climb to 4.8%.
Big picture, the heightened risks of geopolitical conflict, on-going inflation, concerns about an economic slowdown in the U.S. and stock market volatility support further gains in gold in 2025. Bank of America expects the gold rally to continue in 2025 with a target at $3,000 an ounce is on the record advising its clients to buy gold on price retreats. Their advice? If gold drops below $2,500—buy it. But, don’t wait too long, market dips in gold last year were shallow and short-lived.
Our Recommendations
The high-end rare coin market remains an attractive buying opportunity for long-term investors. Rare coins offer investors an opportunity for significant price appreciation in the current environment.
The appeal of rare coins to investors is their impressive historical price appreciation, which has outpaced the level of the underlying precious metal.
Buying Rare Coins
For investors able to hold 5–10 years, ultra-rare acquisitions offer the safest store of wealth and the strongest growth potential. Accumulate the highest-quality coins that you can afford. This strategy will pay off handsomely as rarity tends to appreciate the fastest.
Buying Precious Metals
An accumulation strategy is probably the best option for clients wishing to add to holdings.
Trading Precious Metals
Silver continues to offer a better value than gold. Generally, readings above 65 signal that silver is undervalued and is a strong buy signal for the metal.
The gold/silver ratio is a way for investors to measure the relative value of these two metals. The ratio indicates the number of ounces needed to buy one ounce of gold. Investors have long turned to this ratio to identify attractive long-term entry points for precious metals purchases. A high ratio is generally viewed as a signal that silver is undervalued relative to gold. That is what we’re seeing now.
Current Ratio: 91 oz. silver = 1 oz. gold
You may want to consider converting some gold holdings into silver.
Popular silver products: 10 oz. & 100 oz. silver bars, Silver American Eagles in monster boxes.
