Gold, Silver Prices Slide To End Penultimate 2024 Trading Day; Stocks and Metals Remain Correlated

 

Metals Slide To End Penultimate 2024 Trading Day; Stocks and Metals Remain Correlated

(Bullion News Network) – Precious metal prices will end the penultimate trading day of 2024 in the red as traders await more key signals on where the economy may be heading. Gold dropped around $14.50 per troy ounce on the day, while the spot price of silver declined $.37/ozt before market close. Metal prices began the day with a sharp drop below $2,600 and $29 per ounce, respectively, but a moderate midday recovery saw both gold and silver reclaim those supports. Today’s losses round out a second consecutive day in the red for gold, which is now down $26 since Thursday. Silver has followed a similar trajectory, dropping from $29.77 to $29.05 in just two trading days. 

The relatively lopsided price bearish pressure drove the gold-silver ratio higher to 89.79:1, the highest GSR in over nine months. Gold and silver both lost ground this month, but silver took a much harder percentage hit, dropping $1.86 from a peak of $31.90 on December 11th to today’s monthly low of $29.04 per troy ounce. Barring a few dips, the gold-silver ratio has consistently increased throughout the month of December, culminating in this latest peak within just $.20 of 90:1. 

This month, the stock market and precious metals market have been uncharacteristically correlated. Wall Street’s “Santa rally” ended early last week as the Dow shed 300 points and the NASDAQ dropped two percentage points. Gold and silver prices followed the same trendline last week, dropping on Friday as market sentiment turned cautious during a shortened holiday trading week. With 2025 just around the corner, analysts say that Americans are as worried as ever about the state – and future – of the economy. Last Monday’s consumer confidence report echoes this sentiment. Consumer confidence dropped from 112.8 in November to 104.7 in December, despite forecasters predicting a moderate increase from November’s numbers. 

Wall Street’s “Santa rally” ended early this week, and precious metals seem to be falling in line with the stock market.

Read today’s metals market news here: https://t.co/fuzd66rZMf

— Hero Bullion (@HeroBullion) December 27, 2024

Even more concerning to some traders is that same report’s short-term income expectations index, which fell to 81.1. According to the Conference Board, a short-term income expectations index below 80 may signal that a recession is coming. Typically, experts say that these troubling key indicators point to tailwinds for gold and silver, two safe haven assets that tend to thrive in recessionary or economically uncertain climates. This has not been the case as traders prepare for a busy January. Gold and silver prices dropped throughout December, even when the stock market dove. 

Uncertainty seems to be the key word heading into January. Aside from the usual economic readings, next month will see the inauguration of President-elect Donald Trump, a candidate whose economic policies were a point of contention during the 2024 presidential election. Of particular interest to American traders is the President-elect’s proposal for universal tariffs on imported goods. These policies could lead to higher consumer prices, experts say, both in the precious metals market and in the larger American economy. This could explain the precious metal market’s unexpected close correlation with stock performance this month. Traders across the board may be waiting for more signals from the next President of the United States before placing their bets under a new administration. 

Later this week, expect more major movement in American markets as traders react to several economic data sets. After the New Year, the initial jobless claims report and ISM manufacturing report should give investors a bit more information on where the American economy is likely to begin as a new political order takes shape in D.C.