Although an all-out attack was avoided on Thursday night, it was enough of a reminder to investors that the tensions in the Middle East are still high. Gold futures surged higher in overnight trading and equities tumbled for their worst week of trading since October of last year. Both the NASDAQ and the S&P 500 fell for six straight sessions for the first time since October 2022. 

Gold hit a fresh new all-time high on Friday before paring some gains by the end of the session. Institutional investors are taking shelter in gold and silver as inflation remains persistent in the economy. Investors remain on edge heading into the weekend and the tech sell-off in equities shows that few are willing to hold risk-on assets during this volatile period. 

Earlier this week, Goldman Sachs raised its price target for gold to $2,700 by the end of 2024. Goldman joins other banks with bullish outlooks on the precious metal like Bank of America, which sees gold topping $2,500. Despite these bullish targets, many are speculating a short-term pull-back in gold as equities remain highly oversold and gold buyers begin to thin out. 

Fed members remained hawkish this week with Fed President Kashkari indicating that he would be okay with no rate cuts until 2025 if inflation continues to persist. Fed President Bostic echoed these thoughts and stated that he still believes there will be one cut but wouldn’t rule out zero for 2024. The overly hawkish rhetoric contradicts recent thoughts from Chairman Powell and President Biden. It will be interesting to see how the Fed approaches the situation as we inch toward the November presidential election. 

For the week, Gold COMEX June 2024 futures contracts settled at $2,405.60 while Silver COMEX May 2024 futures contracts settled at $28.735. 

Precious Metals Stocks and ETFs Weekly Performance

Despite the market selling off this week, a majority of it was from a correction in mega-cap tech names. Gold miners did decently well which is understandable given gold’s rocketing price. The Kitco MIGL gold miner’s index finished positive for the week with 14 of the 20 components rising during Friday’s session. Pacing the index to close the week were positive days from Kinross Gold Corp (NYSE: KGC), Equinox Gold Corp (NYSE: EQX), and Alamost Gold Inc (NYSE: AGI). Freeport-McMoran (NYSE: FCX) has been a popular stock lately on social media and Wall Street. Although there was more bullish flow in long-dated options this week, FCX stock inched lower by 2.2%. 

Gold miner ETFs were flat for the week as the Van Eck Gold Miners ETF (NYSEARCA: GDX) and the Van Eck Junior Gold Miners ETF (NYSEARCA: GDXJ) both posted modest losses. Spot gold ETFs fared a little better as both the iShares Gold Trust (NYSEARCA: IAU) and the SPDR Gold Trust (NYSEARCA: GLD) gained 1.4% for the week. IAU and GLD have far outperformed the broader markets this year with 16% returns to shareholders since the start of 2024. 

Silver hit a new 52-week high, topping the $29.00 price level for the first time since 2012. The Kitco MISI silver miner’s index extended its rise for a third consecutive week with seven of its nine components posting positive gains on Friday. There was also more bullish flow for the iShares Silver Trust (NYSEARCA: SLV) this week, although the fund fell by 0.08%. Investors shouldn’t be too concerned as the spot silver ETF is up 12.5% over the past month and 21% year-to-date. 

What’s in Store Next Week for Precious Metals?

It’s a big week next week for stocks as many of the S&P 500’s largest components report earnings. These include mega-cap tech stocks like Tesla, Meta Platforms, Microsoft, and Alphabet, as well as blue-chip companies like Verizon, Exxon Mobil, Caterpillar, Merck, Visa, and PepsiCo. 

Next week’s economic data is highlighted by the Fed’s preferred gauge of inflation the PCE and the Core PCE index for March. All eyes will be on the Middle East this weekend to see if there is any escalation in the tension between Israel and Iran. 

Protect yourself! Buy and store gold now!