As we close the books on 2024

As we close the books on 2024 and start to think about new challenges that lay ahead, it's a good time for some reflection.

Looking back, it's clear that while 2024 was a challenging year for the natural resource sector, some metals—particularly precious metals—did quite well.

Gold got off to a great start and, except for the last two months, continued rising throughout the year, though with high volatility. The net result: the yellow metal ended the year at around $2,600 per ounce, up 26%—its best performance since 2010.

Silver didn’t exactly disappoint either. Prices peaked at around $35 per ounce in October, the highest in 12 years. While it has recently pulled back below $30, it remains up about 21% since the start of the year. This also marks the strongest annual gain for the metal since 2010 (except for 2020, the COVID year). You can see this in the next chart.

Most industrial minerals, however, struggled. Nickel finished the year down 6%, while copper prices remained mostly flat, as did uranium.

Speaking of energy, it was mostly a mixed bag. Natural gas is up about 40%, while oil and coal saw little change.

The takeaway?

Recession fears and global instability clearly weighed on the materials most vital to our economy. Gold and silver, meanwhile, have performed exactly as they should in response to these same fears (and persistent inflation).

But, to address the elephant in the room—the same can't be said for precious metals stocks. Individual exceptions aside, their performance as a group has been largely disconnected from the underlying metals. I’m sure this statement will elicit some nods from those with skin in the game.

Now, I’ve written a lot about how cheap these stocks are relative to their commodities (catch up here, here, and here), so I won’t go over it again. What I will say is that this disconnect presents some great “buy low” opportunities. This is the essential first step in the "buy low, sell high" formula - one that could pay off handsomely in 2025 for those who follow it.

But I'll save most of that forward-looking discussion for January's issue, where we'll outline our expectations for the year ahead. This month's focus is retrospective—a comprehensive review of all our picks from 2024. There’s a lot to go over with ten positions, so let’s dive right in. ...