In a year that saw major land-based warfare return to Europe for the first time since the ’90s, global volatility has become an important challenge. Central banks have responded to geopolitical and rising rate-related challenges by buying gold, with the prospect of rates hitting their peak next year and yields stabilizing creating a path for gold and other precious metals next year. For investors looking to reflect on the year in precious metals, consider the top three gold and silver stories for 2022.
Readers were very intrigued by the news that March, defined by Russia’s invasion of Ukraine, sent gold and silver prices up significantly. The invasion’s reverberations across the global economy, ranging from spiking energy costs to fluctuating grain supplies, saw investors seek traditional sanctuaries from volatility like precious metals.
The spike echoed 2020’s pandemic-driven gold price increase, with the piece citing Sprott market strategist Paul Wong and his analysis of some of the other trends that surround the March 2022 spike. A looming recession was already cited in March by Wong, with the strategist also citing de-globalization, in which the world breaks into regional economic blocks, as a source of increased trust in gold as a safe harbor.
The second-most read story for the year saw Sprott’s senior managing director Ed Coyne set the stage for 2022 in precious metals in a TV appearance.
Coyne spoke to Asset TV’s Alt Summit host Remy Blaire in January address how gold and silver held up during the market’s strong 2021, as well as its prospects for the year. While much could not be predicted given Russia’s invasion of Ukraine, Coyne pointed to inflation sticking for longer, and reminded viewers that gold is a historically-reliable play during inflationary periods.
Rounding off the top-three is a discussion of the uranium. Another piece of the commodities landscape drastically impacted by Russia’s war on Ukraine, uranium had already benefitted from growing demand for alternatives to fossil fuels.
That demand spiked with Europe facing high energy costs this winter, with more reliable power than natural gas or even wind or solar thanks to nuclear power plants’ ability to provide maximum power for more than 93% of the year. Add in Russia being responsible for 43% of worldwide enrichment, as of April, and the price of uranium had some real backing entering the mid point of 2022.
Those trends may have paid off looking back from the end of the year, with the price of uranium rising to $41.30 per pound from its $36.13 per pound price to start 2022.
Inflation still looms for investors entering the new year, with debate raging as to whether it has truly begun to cool or not. Investors looking for ETFs to play some of the more interesting trends in the precious metals space may want to follow strategies like the Sprott Uranium Miners ETF (URNM) and the Sprott Gold Miners (SGDM) for ways to play the space in 2023.
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