Silver Surges Past Key Levels as Gold Steadies: What’s Driving the Precious Metals Market in October 2024?

Key Highlights:

• Gold hits $2,741.30/oz as of October 21, 2024, staying steady amid global uncertainties.
• Silver smashes through the $34/oz mark, trading at $34.16/oz, with bullish momentum building.
• Platinum supply continues to tighten, with rising demand from China’s industrial sector.
• Hydrogen electrolysis sees a surge in demand for iridium and ruthenium, though Europe lags behind.

If you’ve been watching the precious metals market lately, you’d know something big is brewing. Silver has finally done it—after weeks of flirting with resistance, it has blown past the $34 mark, trading at $34.16/oz as of today, October 21, 2024. Investors are buzzing. For those in the know, this is more than just a nice number; it's a signal that silver could be set for a rally as supply pressures mount and demand refuses to back down. But silver isn’t the only metal making noise—gold is holding steady too, giving everyone the sense that the metals market is heading into an interesting phase.

Silver: A Breakout Moment

Let’s start with the star of the moment—silver. At $34.16/oz, silver has moved decisively beyond its $32.94/oz resistance, a level that had been teasing traders for a while. Now, with the metal hitting a day high of $34.33/oz, the market is alive with speculation. Could this be the breakout everyone has been waiting for?

Silver’s run is driven by a cocktail of factors, but chief among them is tight supply. According to the latest Heraeus Precious Appraisal report, Perth Mint’s silver sales in September saw a sharp 49% month-on-month rise. Yet, year-to-date sales are still down more than 40%, a sign that supply has been lagging even as demand stays resilient. For context, silver is a critical component in solar panels, electronics, and electric vehicles—industries that are very much in expansion mode. With green energy goals pushing demand for silver higher, it’s no wonder prices are spiking.

If this upward momentum continues, we could see silver test new highs, especially with industrial demand refusing to cool off. Traders are already positioning themselves for a potential bull run, but with silver, things can change fast. One big move in the U.S. dollar or a supply surge could pull the rug from under this rally, so keep your eyes peeled.

Gold: Steady as She Goes, But Watch for a Spark

Gold might not be grabbing the same headlines as silver right now, but don’t let its steady behavior fool you. At $2,741.30/oz, gold is hanging in there, well supported by the same macroeconomic factors that have been at play for most of 2024. Geopolitical tensions—especially in the Middle East—coupled with global economic uncertainty are keeping gold’s safe-haven status intact.

What’s particularly interesting is how India, the second-largest gold market, is ramping up imports. According to Heraeus, India’s gold imports shot up to 125 tonnes in August 2024, driven by festive demand and tariff cuts. For context, this is the highest level in over three years. With Indian demand set to surpass 800 tonnes this year, it’s clear the gold market has a solid foundation as we head into Q4.

Gold’s price trajectory could get more exciting if inflation in key markets heats up or if the U.S. Federal Reserve makes any unexpected moves with interest rates. For now, gold is playing it cool, but one catalyst could send prices soaring again.

Source: Bloomberg

Platinum: The Silent Struggler

If silver is the rock star and gold is the steady anchor, platinum is the unsung hero quietly grappling with supply issues. The Heraeus Precious Appraisal report points out that global platinum supply is under severe strain, with South Africa—the world's largest producer—seeing a gradual decline in output. Russia, too, has been cutting back production due to smelter maintenance, widening the global market deficit to an expected 380 koz this year.

Yet, on the demand side, China is a beast. The country’s appetite for platinum, especially in heavy-duty vehicle emissions systems, is expected to reach 170 koz this year. With Beijing looking to boost its industrial output through stimulus measures, platinum could see demand spike in 2025, potentially pushing prices higher. But for now, platinum hovers around the $1,000/oz mark, still waiting for its moment to shine.

Source: Bloomberg

Hydrogen Electrolysis: Iridium and Ruthenium Step into the Spotlight

Now, here’s where things get interesting: hydrogen electrolysis. You might not hear much about it in the daily metals chatter, but trust me, iridium and ruthenium are about to have their moment. According to the Heraeus Precious Appraisal, global hydrogen electrolysis capacity is set to jump from 1.4 GW at the end of 2023 to 4 GW by the close of 2024. That’s a massive leap, and it’s bringing iridium and ruthenium into the spotlight.

The key here is that hydrogen electrolysis, especially using proton exchange membrane (PEM) electrolysers, relies on iridium. While it only accounts for about 5% of total iridium demand now, this could change fast as the hydrogen economy scales up. But here’s the catch—Europe, one of the biggest markets for PEM electrolysers, is dragging its feet on rolling out new capacity. This delay could slow iridium demand growth, but don’t be fooled—once these projects get moving, iridium could see a big demand boost.

Ruthenium is also benefiting from growing industrial demand, and while its price rise might not grab headlines like silver’s, it’s a sign that this smaller player is carving out its niche. Meanwhile, rhodium, which has been riding high for most of the year, slipped to $5,175/oz, reflecting some softening demand. But like with all things precious metals, nothing stays quiet for long—especially in these niche markets.

What’s Next?

As we look towards the close of 2024, the precious metals market is shaping up to be a wild ride. Silver is showing all the signs of a breakout rally, gold remains rock-solid in its role as a safe haven, and platinum’s supply squeeze could offer a sleeper hit for investors. But the market is fickle—anything from a change in central bank policies to unexpected geopolitical flare-ups could turn the tide quickly.

So, what’s the takeaway? Keep a close eye on silver as it rides this wave of momentum. If it manages to hold above $34/oz, there’s no telling how far it could go. For gold, stay alert for any economic shocks that could push it out of its current steady range. Platinum’s supply crunch combined with China’s growing demand makes it one to watch, and iridium and ruthenium are gearing up for big roles in the hydrogen revolution.

This market is full of opportunities, but as always, the smartest moves come from staying informed and ready to adapt. If one thing’s clear, it’s that precious metals aren’t done making waves in 2024.