Blanchard Index

Exclusive Precious Metals Market Outlook and Recommendations

Index updated March 1, 2024


Blanchard's Monthly Index

The Blanchard Monthly Index is a roll-up of industry news and economic trends affecting the precious metals market and trading world.

Check back each month for insights and commentary from our leading experts and contributors.

High: | Low: | Current:

The Blanchard Economic Report

Gold Investors Buy the February Dip

Weakness in U.S. economic data, strong central bank buying and expectations of Federal Reserve interest rate cuts boosted gold in the second half of February.

Bargain hunters used the mid-month price dip as a buying opportunity. Gold price action below the $2,000 level was a short-lived event last month. Investors quickly scooped up the yellow metal during two days in February when gold dipped below $2,000 an ounce. From there, gold climbed steadily higher, as investors’ accumulated the yellow metal throughout the second half of February, closing out the month with a modest 0.52% gain.

Consumer Sentiment Slips

U.S. consumer sentiment fell in February, declining for the first time in three months, as Americans revealed uncertainty about their present and future economic situations amid still-high inflation and interest rates. The final reading of the University of Michigan’s index of consumer sentiment registered a 76.9 reading, sliding from the preliminary reading of 79.6.

Fed’s Preferred Inflation Gauge Climbs

In late February, fresh inflation news confirmed that price increases remain above the Fed’s stated 2% target. The January personal consumption expenditures price index excluding food and energy costs rose 0.4% for the month and jumped 2.8% from a year ago. Recent inflation data are proving that the last mile to get to the Fed’s 2% target rate is a bumpy ride indeed.

The government report also revealed that Americans are being forced to dip into their savings as prices for everyday goods and services continues to climb. The personal savings rate stood at 3.8% for the month, down a full percentage point from where it was in June 2023.

Fed Rate Cuts Seen in 2024

The Fed meets next to consider interest rate policy on March 20. However, there are low odds (4%) of an interest rate cut at that meeting. Moving into the spring and summer, expectations for a .25% basis point rate cut jump to 25.1% at the May meeting and 56.8% at the June meeting, according to the CME FedWatch Tool. Gold is expected to continue to garner strength throughout the year as the Fed lowers interest rates, with the potential for new all-time record high seen in the yellow metal. Meanwhile…

State Legislatures Shine Spotlight on Gold

In February, the Kansas state legislature introduced a new bill which would allow gold and silver to be used as currency to cover debts, taxes and state fees.

The Kansas proposal follows a 2023 Arkansas law (HB 1718) – the “Arkansas Legal Tender Act,” which reaffirmed gold and silver as legal tender and also removed taxes on gold and silver. Bills have also been introduced in the Oklahoma and Missouri legislatures for 2024 consideration that would require those states to treat gold and silver as money, as opposed to a commodity.

Stay tuned for fresh developments from statehouses regarding a return to everyday use of gold and silver as money in commerce, just as it has been for thousands of years throughout history.

The Bottom Line

Last year, we saw gold climb to a new all-time record high amid huge central bank buying, investor safe-haven buying, still-high inflation and concerns over an overheated stock market. This February, the brief price dip in gold under $2,000 was viewed as an excellent buying opportunity and the metal traded only two days below that price point. With fresh highs in gold forecast ahead, current levels of gold remain attractive to long-term investors. Gold has proven value in your portfolio as an enduring asset, store of value and a way to hedge and protect and grow your wealth. Do you own enough?

Our Recommendations

The high-end rare coin market remains an attractive buying opportunity for long-term investors. Rare coins offer investors an opportunity for significant price appreciation in the current environment.

The appeal of rare coins to investors is their impressive historical price appreciation, which has outpaced the level of the underlying precious metal.

Buying Rare Coins

For investors able to hold 5–10 years, ultra-rare acquisitions offer the safest store of wealth and the strongest growth potential. Accumulate the highest-quality coins that you can afford. This strategy will pay off handsomely as rarity tends to appreciate the fastest.

Buying Precious Metals

An accumulation strategy is probably the best option for clients wishing to add to holdings.

Trading Precious Metals

Silver continues to offer a better value than gold. Generally, readings above 65 signal that silver is undervalued and is a strong buy signal for the metal.

The gold/silver ratio is a way for investors to measure the relative value of these two metals. The ratio indicates the number of ounces needed to buy one ounce of gold. Investors have long turned to this ratio to identify attractive long-term entry points for precious metals purchases. A high ratio is generally viewed as a signal that silver is undervalued relative to gold. That is what we’re seeing now.

Current Ratio: 90 oz. silver = 1 oz. gold

You may want to consider converting some gold holdings into silver.

Popular silver products: 10 oz. & 100 oz. silver bars, Silver American Eagles in monster boxes.

Â