Silver Storm Mining Ltd. (TSXV:SVRS)
Building the Next Latin American Silver Producer.
Analysts at AuAg Funds, a Sweden-based precious metals investment firm, noted in their recently published 2024 Outlook that while the price of gold is entering 2024 on a lukewarm note, it will continue to hit new highs this year as gold and silver enter a long-term bull market.
Analysts believe that the price of gold could rise 20 per cent this year, looking as high as $2,400 per ounce, mainly due to the Federal Reserve’s monetary policy pivot. The report states that central banks will stop raising interest rates in 2024 in favour of a more accommodative policy stance, which will push gold prices significantly higher for the foreseeable future.
However, gold prices have met resistance above $2,000 and are down 3 per cent year-to-date as recent economic data releases have lowered expectations of a March rate cut by the Federal Reserve.
In contrast, AuAg Funds is more bullish on silver’s performance in 2024, saying it will outperform gold this year. The analysts wrote in the report, “In this emerging bull market, expected to last many years, we predict the gold-to-silver ratio will drop below 30:1, setting an initial goal for 2024 at 70:1,” the analysts said. “Should gold appreciate by 20%, it would end the year at USD 2,475, and with a gold-to-silver ratio of 70:1, silver would close at USD 35, equating to a 48% return.”
Given the rally in gold and silver prices, investors have reason to focus on the stock performance of the underlying miners this year, the firm said. Gold miners are often undervalued relative to gold, a trend that could reverse in the upcoming bull market. Analysts add that mining companies have healthy balance sheets as higher gold prices drive up miners’ margins. In the current environment, stocks of small and mid-sized producers are expected to outperform large producers.
