Last year's surging gold and silver prices likely to rise again this year
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Summary
- Last year international gold and silver prices surged by 65% and 141.5% respectively, attracting investor funds.
- Experts say that due to high peak burden, there is still a possibility of gains this year, but the pace of increase may slow.
- Long-term prospects for rising gold prices are maintained due to ongoing structural factors, but experts recommend a phased approach.
High peak burden 'box range within an upward trend' pattern
A phased approach is necessary rather than chase buying
Last year, international gold and silver prices showed a record rise and staged a strong rally. Gold jumped more than 60% in one year, and silver surged more than 140%, hitting the highest level in 45 years. With prices soaring and funds flowing into related financial products, precious metals investments are seen as returning to the center of safe-haven assets and alternative investments.
On the 6th, according to the New York Mercantile Exchange in the U.S., international gold prices exceeded 4300 dollars per troy ounce at the end of last year, rising nearly 65% year-on-year. The rise in silver prices was steeper than gold. Over the same period, silver futures jumped from 29.24 dollars per ounce to 70.60 dollars per ounce, up 141.5%. This surpassed the peak during the 1980 'silver squeeze' for the first time in 45 years. It is evaluated that increased industrial demand and speculative buying flowed in simultaneously, driving up prices. The net asset value of the exchange-traded fund (ETF) that invests in physical gold, 'TIGER KRX Gold Spot', exceeded 49.2 billion won immediately after listing and surpassed 1 trillion won. The index also rose more than 40% over the same period.
Analysts say the long-term upward trend in gold prices itself is likely to continue into the new year. However, as prices already surged last year, there are views that the pace of increase is likely to slow. The World Gold Council (WGC) and investment banks (IBs) have projected that prices could reach 5000 dollars per troy ounce this year. J.P. Morgan expects the average gold price to reach 5055 dollars per troy ounce by the end of this year.
Structural factors supporting gold prices—such as a shift in U.S. monetary policy, geopolitical risk, and global fiscal instability—are still considered valid. However, with increased peak burden, there is talk that this year may see a 'box range within an upward trend' pattern. Silver prices may see much wider fluctuations depending on the course of industrial demand and the pace of global manufacturing recovery.
Experts recommend a phased approach rather than chase buying.
Reporter Mi-hyun Jo mwise@hankyung.com
