Precious and industrial metals are showing strength, but a correction is expected.

The prices of metals, both precious and industrial, have experienced a significant strengthening in the first months of 2024. This initial boost was largely attributed to the possibility of an interest rate cut by the Federal Reserve of the United States (Fed). However, according to the Economic Studies Department of Scotiabank, it is expected that these prices will experience consolidation or correction in the coming months, which could result in slight setbacks in the values ​​of metals. Throughout the first months of the current year, various factors contributed to the increase in the prices of these assets. In the case of precious metals, such as gold, geopolitical conflicts in the Middle East, speculative purchases, and inflation levels in the United States played a fundamental role in the increase of their prices. On the other hand, industrial metals experienced rises due to the economic recovery in China after the Lunar New Year holidays and the improvement in economic indicators. Although it was expected that the possible Fed rate cut would maintain a positive trend in metal prices, the Scotiabank report indicates that the bullish momentum may be reaching its limit. Throughout this year, gold has experienced an increase of 12.7%, reaching US$ 2,325, projecting to close the year at an average of US$ 2,150 and at US$ 2,050 for 2025. According to technical analysis, it is expected that gold will enter a period of correction and subsequent consolidation to ensure a sustained rise in its price. Despite the corrections recorded in April, the price of gold has shown some resistance to decline, mainly due to speculative factors that drove its initial rise. In the case of silver, there has been an increase of 14.8% to US$ 27.3 per ounce so far this year. It is projected to close the year at an average of US$ 24.75 and at US$ 24 for 2025. This metal, which usually follows the trend of gold, is also undergoing a process of correction and consolidation in its prices, influenced by the supply deficit in the market. On the other hand, industrial metals could also experience a correction in their prices after the strong increases recorded in April, partly derived from speculative factors. Copper, which has risen by 11.7% to US$ 4.49 per pound during the year, is expected to decrease to US$ 4.10 per pound at the end of 2024 and to US$ 4.05 in 2025. In the case of zinc, which has had an increase of 8.6% to US$ 1.30 per pound so far this year, it is expected to average at US$ 1.22 at the end of 2024 and increase slightly to US$ 1.25 per pound in 2025. The recovery of this metal will largely depend on demand from China and the reopening of smelters in Europe, which have been operating at reduced capacity or undergoing maintenance. Given this outlook, it is expected that metal prices will continue at elevated levels due to factors such as physical gold purchases by Central Banks, jewelry demand in countries like China and India, and the growing demand for gold as a safe haven asset. Despite the predicted corrections and consolidations, the future of these markets will continue to be influenced by the evolution of economic and geopolitical factors on a global scale.