Gold Outperforms Silver in Q3 2024
Gold prices have outperformed silver in the third quarter of 2024, with gold prices rising by 14% and hitting an all-time high of $2,672 per ounce on September 26. In contrast, silver prices climbed by 8% but remain 1.7% below their 2024 peak of $32 per ounce reached in late May.
The underperformance of silver is attributed to weaker industrial demand, while gold’s strong quarter was fueled by central bank purchases and Asian consumer buying, along with a shift in global gold ETF flows as the U.S. Federal Reserve delivered its first rate cut in years.
Gold Equities Lagging Behind
Despite the positive performance of gold and silver, gold equities have underperformed year-to-date. Gold has gained 29% and silver 33%, while the S&P/TSX Global Gold Equity Index is up only 32% and the XAU has risen 29%, both down 3% from their late September peaks.
Top-performing gold equities include IAMGOLD (+109%), New Gold (+103%), Kinross Gold (+56%), Agnico Eagle Mines (+49%), and Alamos Gold (+48%). On the other hand, underperformers include SSR Mining (-45%), B2Gold (+1%), Endeavour Mining (+7%), Barrick Gold (+12%), and Franco-Nevada (+13%).
Momentum in Mid-Tier Gold Equities
In Q3 2024, mid-tier gold equities gained momentum, with the S&P/TSX Global Gold Equity Index and XAU both rising by 18%. New Gold led with a 52% gain, followed by IAMGOLD (+41%) and SSR Mining (+32%). However, Franco-Nevada and Triple Flag Precious Metals underperformed with gains of only 6%.
Insight
It is interesting to note that while gold prices have surged, gold equities have not kept pace, even with a strong quarter in Q3 2024. This disconnect between the precious metals and the equities in the sector could be due to various factors such as market sentiment, company-specific issues, or broader economic trends affecting the industry.
