If you’re like me, you’ve been keeping an eye on the precious metals market. Whether you’re in the market for gold, silver, or platinum, you’re looking to see how the market will react to various events over the next few years. And while some of the biggest developments will affect these markets, we’ve identified several other factors that could play a role as well.

Gold price

If you are wondering what quarter of 2022 was the best for precious metals, you should know that the answer is not simple. It depends on a number of factors. But the most important one is the macro backdrop.

For instance, gold prices surged in the first couple months of the year, but then they slowed down. This was because the US dollar was strong. In fact, the Fed was able to hike rates by three-quarters of a percentage point in early November, which impacted the price of gold.

As a result, the dollar continued to climb. During the second half of the year, the US dollar was up about 16% against a basket of major currencies. That may not sound like much, but it is enough to weigh down stocks and commodities.

Inflows into gold ETFs

Gold ETFs saw strong inflows in the fourth quarter of 2022, despite the global economic slowdown and higher interest rates. The gold market is largely driven by central bank policy, while geopolitical uncertainty is also contributing to its price fluctuations.

According to precious metal IRA companies, the value of gold has been linked to a collective belief that something is valuable. Gold is therefore a stable asset that can be used as a hedge against volatility in the financial markets. Its long-term performance is positive. However, it has experienced significant volatility in the past.

Gold prices have fallen around 20% since their historic highs in the pandemic. This reflects the rising inflation in the US, which is driving up energy costs. But the price of gold is expected to rebound to $1,900 by the end of 2024. In addition, investors can gain exposure to physical gold through futures markets or ETFs.

China’s demand for platinum

China has been identified as a key market for platinum. However, a new report from the World Platinum Investment Council (WPIC) finds the country’s demand for platinum is not yet fully tapped. The organization says the country’s imports are at least 1.2 million ounces higher than its demand.

According to the WPIC, it will be another two years before the country’s supply and demand are in balance. This is due to strong imports into China, as well as large flows into exchange-traded funds. As a result, the platinum market is expected to experience a deficit in 2023.

Although there is no data available for Chinese consumption of platinum, WPIC says the country may be stockpiling the metal in preparation for future demand. In addition, China is planning to increase the amount of platinum used in catalytic converters for heavy vehicles.

Interest rate hikes

Gold was one of the best performing asset classes in the first half of 2022. This was due in part to hopes for a less hawkish Fed. However, the economic slowdown remained, which had a negative impact on living costs.

The Fed’s interest rate hikes kept the markets glued to the Federal Reserve’s decisions. However, they were also paired with geopolitical uncertainties. Combined with the US dollar’s strength, gold prices were affected.

During the second half of 2022, the gold market saw a significant correction. From a March 2022 high of $2,051 an ounce, it dropped to a September 2022 low of $1,406. Despite the correction, the long-term trend was positive.

Central banks raised interest rates aggressively in 2022. But, inflation remained high. A potential recession could lead the Fed to slow down its rate hike campaign. Currently, the Fed’s target federal funds rate is 3.75% to 4%.

Silver’s volatility

The fourth quarter of 2022 is set to bring some volatility to the price of silver. Investors have been jittery about the deterioration of the economy. This is especially true in the light of rising inflation.

However, the metal is expected to have a positive outlook in the coming years. Demand for industrial applications and the green economy is forecast to grow. Also, demand from electric vehicle manufacturing will increase. During recessions, industrial demand for silver drops. If the industrial sector returns to normal, investors can expect handsome returns.

Besides industrial demand, silver demand also benefits from a growing consumer electronics market. Demand in the jewelry and silverware segments will reach 300 million ounces this year. Moreover, strong inventory replenishment will drive demand in the silverware segment.