Information Line - January 2025

Perspective
By Rich Checkan

Happy New Year!

Last week, we talked about the year that could have been for gold and silver. In the end, 2024 fell short of the expectations of most gold and silver bugs.

Gold touched $2,790.07 on October 30^th. Gold made thirty-nine new all-time highs last year. Gold was up over 27% for the year. Everyone thought $3,000 gold was in sight by year end.

Everyone was wrong.

Silver had a pretty good run in 2024 as well. On October 22^nd, silver hit its high for the year of $34.81 per ounce. Silver’s average price in 2024 was $28.27. Silver was up over 21% for the year. Not shabby at all. Many believed silver would break out last year to overtake gold.

Many were wrong.

Here are the numbers for 2024…

 Gold, silver, Bitcoin, and U.S. stocks all posted strong performances last year. That is not surprising with Chairman Jerome Powell and the Federal Reserve cutting interest rates despite persistent inflation.

Investors saw this as easy money.

The surprising thing about the performances of gold and silver last year is they appreciated significantly despite the U.S. dollar’s appreciation. Last year, the dollar improved by nearly 8%... starting the year at $102.20 on the U. S. Dollar Index and finishing the year at $108.49.

That tells me two things…

First, it speaks of the power of central bank gold-buying.

Second, it talks to the potential for both gold and silver once the elusive Western investor joins the party.

Wait and See
Great! That was last year, What about this year? After all, that is what I promised to share with you last week.

Since the election, gold and silver have corrected, and they have failed to regain the lofty levels they reached at the end of November. Yes. They have recovered a bit, but not all that was lost.

And… I do not expect them to go on a tear anytime soon. They may surprise me, but I doubt it.

I am hearing quite a bit that gold and silver are losing out to Bitcoin and stocks. The idea is that President Trump is positive for both crypto currencies and equities, so investors are putting their funds into those markets at the expense of precious metals.

I disagree.

I believe gold and silver were bought prior to President Trump’s victory because investors were scared. They were hedging their bets.

Since November 6^th, investors have taken a wait and see attitude toward gold and silver. Should investors be confident in President Trump’s success in slashing government? Let us wait and see.

Should investors be confident in President Trump’s success in slashing regulations? Let us wait and see.

Should investors be confident in President Trump’s success in slashing taxes? Let us wait and see.

And… why not?

For the past year, the world has been watching the petri dish known as Argentina. President Javier Milei has been working his experiment of slashing government and balancing budgets with incredible success. He has challenged the establishment… and he is winning.

Why would we not expect similar results in the I.O.U.S.A. from President Trump and his Department of Government Efficiency (DOGE)? 

My theory is that investors are waiting to see. Until they do, gold and silver will take a pause. I see either a slow increase in gold and silver prices or range-trading for at least the first quarter of 2025… and most likely for the first half of 2025.

I believe it will take that long to measure the results of the incoming administration.

If the new administration is successful, gold and silver will still climb, but they will do so in a slow and methodical fashion. 

If the new administration runs into entrenched swamp critters, the climb for gold and silver will be more rapid.

Either way, I see both metals moving higher by year end.

What Will Drive Gold and Silver in 2025?
The same things that drove gold and silver this past year will drive them this year…

• Central banks will continue to buy gold as a way to reduce U. S. dollar exposure and to better hedge their foreign currency reserve portfolios against uncertainty and inflation.

• Investors will continue to hold gold as a safe haven as geopolitical tensions continue to flare around the world… notably in the Middle East, on the Russia/Ukraine border, and in the South China Sea.

• Investors will continue to hold gold as a hedge against inflation.

• Investors will continue to hold gold as a buffer against the uncertainty in the world as a result of citizens around the world (in the U.S.A., Germany, France, Argentina, and Canada to name a few) pushing back against the government status quo.

• And… silver will ride gold’s coattails in every case.

At least, that is what I see initially. And that is not to say that silver’s fundamentals are not strong. They are. But I still see silver following gold’s lead in 2025.

As the events of this year play out, accumulate both gold and silver at bargain basement prices as long as they last.

Buying gold and silver well is how shrewd investors Keep What’s Yours!

Got Gold?!?!

Got Silver?!?!

To Keep What’s Yours, simply contact us today. Visit our online store. Send us an email. Call us toll free at (800) 831-0007.

Embrace this dip… 

—Rich Checkan

Editor's Note: Brett Eversole joined Stansberry Research in 2010. He is the lead editor and analyst for True Wealth, True Wealth Systems, and DailyWealth. Don't miss when he joins us on January 23rd at 7 pm for the next On the Move Webinar with Rich Checkan and Adrian Day. Register here.

Feature
Two Metals Other Than Gold to Own in 2025
By Brett Eversole

2024 was a resurgence year for gold investors…

The metal firmly broke above $2,000 an ounce for the first time. And it’s 27% rally managed to beat U.S. stocks, which also had a fantastic year (rising 25%). 

The reasons for the boom aren’t complicated… because gold is the simplest precious metal. It's valuable because people want to own it... But other than that, it isn't very useful.

Last year, jewelry accounted for about half of gold demand. Investment made up another 23%. And central-bank buying made up 21% of demand.

Technology – gold's only real industrial use – was just 7%. That means about 93% of gold demand has nothing to do with gold's properties as a resource or commodity. And that gold still stays in circulation... It isn't "used up."

In other words, gold is in many ways a pure investment market. And that makes it simpler to analyze.

That's the opposite of basically every other commodity in the world. That includes other precious metals... like the ones I’m sharing today.

This group is lesser followed than gold. But as we’ll see, it’s poised for big returns in 2025. 

Let me explain…

I expect good things from gold this year. But the bigger opportunity for investors is in platinum group metals ("PGMs"). These include platinum, palladium, rhodium, and a few other, less important metals.

PGMs are special because they're rare, dense, stable, and resistant to chemicals and corrosion. But most important, they have catalytic properties.

In very simple terms, this means they work as catalysts in a chemical reaction. And crucially, catalysts can start reactions without breaking down along the way... So you can use them over and over again.

Because of that, the industrial demand for PGMs is massive. You'll find them in most cars on the road, for example. We use them in catalytic converters, which turn unsafe exhaust into safer gases before they exit the vehicle.

Automotive uses make up about 30% to 45% of platinum demand. Other industrial uses are about a third of demand. Jewelry is about a quarter. And pure investment makes up the rest.

Palladium is even more geared toward the auto industry than most other PGMs. A massive 82% of palladium demand in 2022 came from that area. The rest of the demand came from other industrial uses.

So, PGMs are precious metals, just like gold... But unlike gold, their prices rise and fall based on supply-and-demand imbalances. These are far from pure investments.

That explains why there’s such a great opportunity today. You see, these metals have taken a beating over the last few years... thanks to the rise of electric vehicles ("EVs").

EV sales were essentially nothing back in 2016. They accounted for less than 1% of the market in the U.S. But by 2023, that had grown to an impressive 8% share of new-vehicle sales.

The boom began with Tesla. But every other major automaker jumped into the EV space in a race to catch up. And that incredible growth has put EVs on a path to eventually overtake internal-combustion vehicles on the road.

The switch in auto-sales trends was a bad sign for PGMs. These metals – specifically palladium – get a massive amount of demand from traditional gasoline-powered cars. So it's no wonder their prices have crashed in recent years. Take a look...
 

Platinum is down nearly 30% since peaking in 2021. Palladium is down more than 60% over the same period... And at its worst, the metal dropped more than 70% from its 2022 high.

This PGM bloodbath happened on the back of the EV boom. But now, things have changed – because it appears that EV boom got ahead of itself...

In the first half of 2024, EVs lost market share in the U.S. for the first time. That might turn out to be a blip on the radar – but it's the first letdown in a growth market that seemed to have nowhere to go but up.

Now, I fully expect EV sales to keep growing from here. But that will probably happen at a slower pace... which means long-term PGM demand will be much higher than many thought just last year.

This is already turning the market upside-down...

Johnson Matthey – a major company that makes auto catalysts – expects a platinum shortfall of 598,000 ounces in 2024. That's up from a 518,000-ounce shortfall in 2023. And it's the largest supply deficit in a decade.

Palladium saw a similar 900,000-ounce deficit in 2023. And the World Platinum Investment Council expects deficits to continue this year and in 2025.

In short, the EV craze led folks to think we wouldn't need as many PGMs in the future. But the slowdown has led to a setup where we need more of these metals than we're pulling out of the ground each year.

When demand outruns supply, the investment outcome is clear... dramatically higher prices.
This is the fundamental driver for platinum and palladium in the coming years. 

You can buy both metals in physical form. Or, to keep things simple, you can use exchange traded funds (ETFs). I recommend the abrdn Physical Platinum Shares Fund (PPLT) for platinum and the abrdn Physical Palladium Shares (PALL) for palladium. 

Now, it’s important to note that these two metals haven’t looked much like gold over the past year. While the yellow metal soared in 2024, platinum and palladium fell. 

That makes this a contrarian opportunity. But if you can stomach the volatility, it’s a bet worth considering in 2025. 

Editor's Note: Omar Ayales is the Senior Trading Strategist & Editor at GCRU (Gold Charts R Us). If you have any questions, you can reach him at oayales@adenforecast.com or visit www.goldchartsrus.net. 

Hard Stuff
Follow the Fundamentals Fueling Gold's Secular Bull Market
By Omar Ayales

The gold universe sold off at the end of 2024 as the Fed hinted at a shift in monetary policy for 2025. The Fed announced only two rate cuts in 2025, and it might not even get the chance to deliver on that guidance. The reason is that inflation remains persistent and consistently above the 2% target.

Most investors were baffled by the 25 basis point cut and had trouble matching Powell’s testimony with policy action. At this point and when looking at the data it seems the Fed’s real motives for cutting rates seem to be politically motivated.

One of the most noticeable reactions to the rate cut was the rebound in longer-term yields. Most yields on LT U.S. treasuries are up since the Fed cut the Fed Funds Rate on the expectation of higher inflation. Remember, the expectation of higher yields goes hand in hand with the expectation of higher inflation.

More importantly, higher inflationary expectations are the backbone of gold’s current secular bull market run. Moreover, just recently, in 2020-2022, LT U.S. treasury yields (and the expectation of inflation) broke above a 40-year downtrend, opening the door to a new mega trend of higher inflation for longer—a trend that, as history shows, could take 30-40 years to develop (we’re currently on year 5).

As we’ve seen during the past several years, gold tends to decline due to hawkish Fed rhetoric. However, when the dust settles, it follows the fundamentals, meaning inflationary expectations. 

The chart below shows the primary trend for longer-term U.S. treasury yields and how they compare to gold. The chart shows a long-term view since 1967. Notice that out of the 58 years shown on the chart, only during 11 of those years gold and LT U.S. treasury yields moved in opposite directions. The other 47 years saw gold and yields move together. Interestingly, during the 11 years when gold moved opposite to yields, it was still moving together with inflation. During those 11 years, LT treasury yields decoupled from gold and rising inflation, possibly due to monetary policy and stimulus to counter the recession that followed the dot-com bust.

Notice that back in 2020-2022, when treasury yields broke out from a mega downtrend, gold also started to move up, breaking to new highs. The recent bounce up in LT treasury yields suggests that gold will follow yields higher.

    Another key indication gold will likely continue on its bullish rise and stellar performance in 2025 is the relationship between the junior gold miners with the senior gold miners. Typically, senior junior miners are more volatile than senior companies since they represent the most speculative wing within the gold universe. However, when junior gold miners start to outperform senior gold miners, it tends to be a strong signal of stronger price action within the gold universe overall.

    Notice the chart below; it’s a comparison between junior and senior gold miners, specifically a ratio between the GDX (a highly traded ETF that tracks senior gold miners) and GDXJ (a highly traded ETF that tracks junior gold miners). When the chart is on the rise, it’s benefiting Juniors. When it’s on the decline, it’s benefiting senior miners. Notice since 2022, the junior miners have been generally outperforming the senior miners. A strong and bullish signal for the gold universe. 

Interestingly and noteworthy, since the rise in inflation and LT yields is partially due to strong economic activity in the U.S. and the expectation that the U.S. economy will continue to thrive under a pro-growth Trump presidency (remember the U.S. economy accounts for a third of global GDP), we could see the U.S. dollar index rise together with treasury yields and gold. Gold will likely continue to outperform the U.S. dollar index, but the dollar will likely continue to outperform most other global currencies, as it has done over the past ten years.

Notice this next chart. It compares the price of gold, the U.S. dollar index, and a plethora of major global currencies. Although gold has been the clear winner since 2017, the U.S. dollar index has been second best, outperforming global peers handsomely. A tendency that has not been typical historically but it’s likely to continue in 2025.
 

Editor's Note: Nomi Prins is a best-selling author, financial journalist, and former global investment banker. Prinsights Pulse is a new, free publication that’s curated by Nomi Prins. Designed for everyone from executives at large institutions to individuals seeking to enhance their financial understanding, this powerful newsletter provides essential insights into economic trends that affect us all. This article was originally published on January 7, 2025. Click here to discover more of Nomi's insights.

The Inside Story
Five Commodity Trends to Follow in 2025
By Nomi Prins

Happy New Year!

As we leave 2024 behind, we anticipate increased uncertainty as the world shifts gears. The expectation is that we will continue to see a rise in geo-political tensions, debt, supply chain warfare, trade and tariff battles, over-stretched banks, companies and consumers being pushed to the brink, and real assets finding their footing as safe-haven and inflation-containing.

With all of the challenges, there are opportunities.

One of my favorite things to do is ‘wave-jump’ into the Ocean. What does that mean? It is quite literally jumping into an incoming wave, and then moving with it toward shore. The key is to not fight the Ocean. Instead, I choose to jump right in. That means flowing with the wave and awaiting the next one that will inevitably come. The waters can be choppy one minute and smooth the next. Nothing can be timed perfectly. 

All of that is okay if your philosophy is one of patience. That’s especially true with investing.

Over this month and throughout the course of the year, we’re going to delve into geo-politics, the economy, and finance in an effort to explore how they impacts you, your long-term investments and the world around us. Our goal is to unpack what’s unfolding in areas like commodities, the U.S. dollar, the Federal Reserve, Wall Street, Energy, Artificial Intelligence and much more.

Below are the top five commodity trends we’ll be following in 2025.

Uranium and Nuclear Energy Remains Bullish
After reaching a 17-year high of $106 in February, uranium prices drifted downward to close 2024 at $71.35 per pound.

Three main catalysts boosted uranium prices into an average range of $85-90 last year. The top uranium catalysts were:

1. The U.S. import ban on Russian uranium in May was followed by a Russian retaliation ban in November.

2. Supply-side constraints, including the world’s largest uranium producer Kazatomprom’s reduced output.

3. Nuclear power plant construction, re-openings and technological advances such as small and micro-modular reactors.

The market’s view that supply concerns would be sorted by year-end caused uranium prices to dip. But we think that’s overdone. The underlying fundamentals associated with uranium along with Trump administration and bi-partisan political support in Congress and at the state level for the sector remain intact.

The global push for nuclear energy was extended at COP29 as 6 more countries pledged to triple their nuclear power use by 2050, bringing the total to 31. Today, 64 reactors in 15 countries are under construction.

The World Nuclear Association predicts uranium demand will increase by 28% by 2030. In order to meet that demand, uranium majors must increase annual production. That won’t happen overnight, so supply challenges will remain as existing mines restart and acquisitions occur.

Expect uranium to hit $85 mid-year and $100 by year-end on nuclear power focus.

Gold Tailwinds Will Outpace Headwinds
Gold rose 25.5% in 2024, its best performance in 14 years. The king of precious metals hit a new record of $2800 in October before closing the year at $2,641 as a reaction to the U.S. election and a Fed-induced dollar rally.

Near-term uncertainty over what Trump’s second term could mean for the global economy, trade wars and inflation trends may bring headwinds – but these factors will ultimately be positives for gold.

The ongoing central bank demand for gold, which hit historic highs last October, together with slowing economic growth, greater than expected rate cuts or any deterioration of financial conditions, could spur the move to gold.

China will continue to buy gold but is not the only gold buying nation. The Central Banks of Turkey, India and Poland all purchased more gold last year. Expect this trend to grow in 2025.

Gold could hit $3,000 per ounce in 2025 and $4000 by 2026.

Silver Streak for 2025
Silver hit $35 per ounce in October – its highest level since 2012. Though prices dipped below $30 by year-end as the dollar rallied on Trump’s election victory, silver returned around 25% in 2024.

In addition to safe haven and gold-silver ratio buying, industrial demand and the energy transformation remain drivers of silver prices into 2025.

If the White House walks back environmental commitments, it could hamper near-term silver prices. However, it’s unlikely Elon Musk, in his new “role”, would push policies that hurt Tesla or its energy business – that includes solar energy, which relies on silver.

As we’ve detailed at Prinsights, solar demand is growing. So is electrification, which uses silver. Yet, there was flat mine production in 2024, even accounting for second sources like recycling. Aboveground inventories helped temporarily, but that supply is dwindling.

We see acquisitions in the silver space in 2025 as junior miners approach project completion targets including Aya Gold & Silver’s Zgounder and Endeavour Silver’s Terronera mines.

Expect silver to retest $35 levels in the first half of 2025 and hit $45 by early 2026.

Copper Rebound on Soaring Electricity Demand
Copper prices closed 2024 at $4.02 per pound, off mid-year highs of $5.11 and returning 3.70%. That drop was largely a reaction to China’s economic slowdown concerns and fears surrounding potential negative impacts from U.S. tariff policies.

China comprises 56% of global copper consumption, so any headline economic slowdown number can worry investors and impact prices.

However, China posted three consecutive months of rising manufacturing figures to end 2024. It also leads the world with 80% of EV sales in 2024, which were up 25% over 2023. Even with higher EV tariffs from the U.S. already, China’s exports outside the U.S. are growing. Its industrial sectors that used copper showed year-end spurts.

Expect China to continue to add stimulus measures in 2025 as well. In short, don’t count China out. Meanwhile, the demand for copper is still set to outpace the supply.

The International Energy Agency (IEA) predicts total electricity consumption from data centers alone to reach more than 1000 TWh in 2026. That’s double their 2024 consumption.

But data centers are only one piece of the mega electricity puzzle. There’s also worldwide EV growth and ongoing demand for electrification and sustainable energy in all industrial arenas.

That’s why the IEA targets annual copper demand for electricity grids to double by 2040. As we’ve detailed at Prinsights, the Copper Decade is here to stay.

Expect copper to retest highs of $5.00 in 2025 and reach $5.50 in 2026.

Critical Materials Wars Will Boost Acquisitions
Starting in late 2023, the number of critical minerals deals climbed higher. Major deals included the merger between Allkem and Livent for an estimated $6.2 billion, Rio Tinto's acquisition of Arcadium Lithium for $6.2 billion, Pilbara Minerals' acquisition of Latin Resources for $406.3 million, and SQM and Hancock Prospecting's acquisition of Azure Minerals for more than $1 billion.

There were 24 global critical minerals centered in mergers and acquisitions (M&A) deals in 2024, in contrast to 49 in 2023. That number dipped, but the total deal size grew to $14.8 billion, which was considerably higher than the $5.3 billion total in 2023.

Lithium was the most sought-after element, prompting the largest total deal value from 2020-24 (of $24 billion). However, we expect M&A volume for other critical minerals to rise in 2025.

Interest rate cuts in the U.S. and Europe should help M&A financing in the critical materials space in 2025. Potential White House discussions about a strategic minerals reserve and bi-partisan domestic supply initiatives in the U.S. for national defense could spur the public and private sectors to rectify its disadvantaged position. This could boost the exploration and processing sector in the U.S. as they look to compete and keep up with China.