Welcome to the newsletter where I help you navigate the world of finance, investments, and precious metals. But that’s not all – I also focus on optimizing your portfolio and uncovering promising investment opportunities that can drive long-term growth.
General Overview
In 2024, we saw above-average returns on many stock exchanges: New York, Frankfurt, and Tokyo. The best-performing stock exchange of 2024 was in Argentina.
The FED intends to cut interest rates at least twice in 2025.
The US dollar is strengthening, and the euro is at its lowest since November 2022.
Gold saw its largest annual increase since 2010.
Bitcoin ETF inflows brought the price back close to 100,000 USD.
China's real estate market has seen a total loss of 18 trillion dollars over the last three years, surpassing the losses the US faced during the global financial crisis.
The US stock market added more than 7.11 trillion USD in 2024.
Source: Watcher Guru
Global Stock Market Returns in 2024
Argentina had the highest returns, while Brazil had the lowest.
Source: Charlie Billelo
Stock Markets Don’t Always Reflect the State of Economies
The German DAX index ended 2024 with an 18.85% growth, following a 20.3% increase in 2023.
Despite Germany's GDP contraction in 2023 and 2024, the index had the best consecutive years since 2013.
Source: Bloomberg, HolgerZ
Record Capital Concentration in a Small Number of Companies Is a Bad Sign
The last time the top 10 largest stocks represented 38% of total market capitalization was just before the "Great Depression."
Source: Compustat, CRSP, Goldman Sachs
The Dollar is Getting Stronger
The US dollar is currently strong due to various factors, including the better relative economic stability of the US compared to other regions…
Overvaluation of the dollar could impact global trade and commodity markets, as a stronger dollar may put pressure on commodity prices.
Could such an overvalued dollar cause a correction if global economic conditions change the current trend?
Source: BofA Global Research
Euro-Dollar Parity Coming Soon?
The euro is approaching parity, having fallen to its lowest level against the US dollar since November 2022.
EUR/USD has dropped over 8% since mid-September and is on track for its 4th consecutive month of declines.
Source: Barchart
The Chinese Yuan is Also Losing Ground Against the Dollar
The Chinese yuan has dropped to its lowest level against the US dollar since October 2023.
Source: Barchart
High Gold Prices Despite Falling ETF Gold Holdings Are a Good Sign
Physical gold has become the preferred form of gold, especially in China and India.
Since 2022, central banks have purchased a record ~2,800 tons of gold.
As a result, gold prices surged in 2024, marking the third-best year in over 40 years.
Total gold holdings in ETFs fell by 3% year-on-year in 2024, marking the fourth consecutive annual decline. However, gold prices are strongly supported by physical demand, which is more important than ever.
Source: Bloomberg, Kobeissi Letter
Gold and Silver and Expectations for 2025
After the exceptional rise in gold and silver prices in 2024, with gold achieving its largest annual increase since 2010, and silver recording a more than 21% rise in dollars, expectations for 2025 are pointing towards continued growth.
Key factors supporting prices include the increased interest from central banks, which have purchased record amounts of gold in recent years to diversify reserves, as well as ongoing geopolitical tensions that are directing investors to safe havens.
Additionally, the strong US dollar and rising inflation continue to sustain demand for precious metals, as investors seek wealth protection. Although analysts predict that the growth in gold and silver prices may be slower than in 2024, the anticipated loosening of monetary policy, interest rate cuts, and uncertainty in financial markets maintain a positive trend, which could further strengthen interest in precious metals.
Recent article about my 2025 expectations-available HERE
Gold's Performance in the Last 15 Years in Global Currencies
Gold Return in 2024: 34% (EUR)
Source: Goldprice
Silver's Performance in the Last 15 Years in Global Currencies
Silver Return in 2024: 29% (EUR)
Source: Goldprice
Top 10 Gold Buyers Between 2010-2023
Source: Mining Visuals
Industrial Demand for Silver Increased by 56%
Industrial demand for silver is expected to reach a record level in 2024, representing a 56% increase over the last 10 years!
Source: Peter Krauth, The Silver Institute
Be Smarter or More Disciplined?
What does Warren Buffett say?
Source: X
Best regards,
Peter
Thank you for reading.
The opinions and analyses cited are educational and do not constitute financial advice. I do not endorse or recommend any investments based solely on the above information and recommend consulting a qualified financial advisor beforehand. Investors must consider their financial situation, investment goals, and risk tolerance before making any decisions. I am not responsible for any investment losses that may arise from using this information. For in-depth advice, I recommend consultation via peter.herman@valores.si
