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Which Precious Metal To Buy For 2024: Gold vs. Silver?

Based on the single most important leading indicator of gold and silver, it is clear that silver has more upside potential going into 2024.

Gold is heating up, silver is somehow lagging but has a tremendously bullish long term setup. Which precious metal has most upside potential in 2024? The answer is simple, and we can derive it from the leading indicator that dominates precious metals prices: COMEX futures positioning.

Note that we were convinced that gold would move higher, we even said so in public writings even though we used much more detail in our premium service Momentum Investing. In our premium service, we track developments throughout the year to complement our public posts gold forecast and silver forecast.

Gold bullish in 2024

Will Gold Print New All-Time Highs In 2024? The short answer: YES.

What Is Gold’s Highest Monthly Closing Price? And Why It Matters. The short answer: 1989.62 USD/oz. It matters because a monthly closing price above 1989.62 USD/oz might be the start of gold’s long overdue rally to 2250 USD/oz.

Is Gold Expected To Move Higher And Set New All-Time Highs? Obviously, YES.

That said, when gold & silver moved sharply lower, in the last week of September, we said to stay calm and focus on precious metals’ leading indicators. What we noticed was very simple: Gold’s Leading Indicator Among The Most Bullish Readings In The Last 10 Years.

The leading indicator we are talking about is CoT (source). It is a stretch indicator. In other words, its setup suggests how much price move higher or lower, depending the setup and dominant trend. In other words, it is an indicator that suggests the likelihood of a turning point to occur. It is not a timing indicator, it will not tell exactly when a turning point might occur.

That said, we focus on the net short positions of commercial participants in the gold futures market, the blue bars in the center of the chart. When their positions get below 100k contracts (net short), it implies the price of gold is stretched to the downside, there is not a lot of downside left. This is indicative of a turning point, a rally should occur soon, that’s how to read these setups.

As seen, in the last 3 years there was only one occurrence in which net short positions of commercials fell below 100k contracts: summer of 2022. That setup, last summer, resulted in a price rally of close to 30%.

Read more: investinghaven