Housekeeping: Good Morning. There will be no broadcast tomorrow
“The Gold reset is a process, not an event”
Today:
Discussion: Silver, Oil, Museum Media
Premium: UBS: Silver's Turn
Discussion: UBS Buries the Lead
1- 2025 UBS Precious Metals Outlook
Key Points
Last year, gold and silver posted their strongest annual gains since 2020 despite a selloff following Donald Trump’s US election victory. Platinum and palladium lagged, finishing 2024 in negative territory.
A stronger USD and elevated US yields will likely remain 1H25 headwinds but should be more than offset by demand for gold as a diversifier. A nascent recovery in global industrial production should support silver and, to a lesser degree, platinum and palladium in 2025.
We remain long gold in our global strategy with a target of USD 2,850/oz, and like to sell downside price risks in silver ahead of opportunities to be long outright (as gold rallies). For platinum group metals, our strategy of choice is selling the price downside in platinum.
Actual Key Point
Silver prices lagged gold prices in 2024. This is not unusual despite silver having a beta to gold price changes in the range of 1-2 times. Over the last 50 years, when gold prices rose, silver outperformed only half the time.
But what happens after silver underperformed gold in those years, like in 2024?
Why UBS is recommending clients sell puts.. and also why their prop desk is likely playing long side
China has not enabled Silver accumulation by its own citizens (yet) due to the CCP still stockpiling it for high-tech production. Eric Yeung and Bai Xiaojun
More at bottom…
3- Sprott’s New Silver ETF
TORONTO, Jan. 15, 2025 (GLOBE NEWSWIRE) -- Sprott Asset Management LP (“Sprott Asset Management”) today announced the launch of the Sprott Silver Miners & Physical Silver ETF (Nasdaq: SLVR) (the “ETF” or “SLVR”), the only1 ETF focused on providing pure-play2 exposure to silver miners and physical silver, an undervalued precious metal with evolving industrial and technological uses. Source
US equities rallied on Wednesday after a softer than expected inflation report and strong bank earnings. Large caps and small caps advanced: S&P 500 (+1.83%) vs. Russell 2000 (+1.99%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) rose 1.31% and 1.28% respectively.
Market News: Museum News
"Big bank profits surged in the fourth quarter and Wall Street roared back to life, with net income rising 50% at JPMorgan Chase and more than doubling at Goldman Sachs. WSJ
"The consumer price index increased a seasonally adjusted 0.4% on the month, putting the 12-month inflation rate at 2.9%. CNBC
"Investors have poured record amounts of money into a fund that spreads its assets equally across the S&P 500, as concerns mount that Wall Street’s returns have become overly reliant on a handful of technology titans. FT
"New York Fed President John Williams said he expects inflation to continue cooling toward the central bank’s 2% target this year, adding that he won’t be satisfied until the goal is reached... WSJ
"BlackRock attracted a record amount of new money in each of the final two quarters of 2024, driving net inflows at the world’s largest asset manager to $641bn for the full year. Source: FT
"Quantum computing stocks rallied Wednesday following a directive from Microsoft urging businesses to get “quantum-ready” in 2025.CNBC
Geopolitics/ Politics: Taking Credit
via Newssquawk
"Trump administration's national security adviser: We made it clear to the Israelis that if Hamas does not abide by the agreement, we will be with them in the war", according to Sky News Arabia.
A "tense" weekend meeting between Prime Minister Benjamin Netanyahu and incoming Mideast envoy Steve Witkoff led to a breakthrough in the hostage negotiations, with the top aide to US President-elect Donald Trump doing more to sway the premier in a single sit-down than outgoing President Joe Biden did all year, two Arab officials told The Times of Israel on Tuesday.- ZH
Hamas Official says they are committed to the ceasefire agreement announced by the mediators, via Al Arabiya.
Israeli PM Netanyahu thanked US President-elect Trump for help in the Gaza deal and they agreed to meet in Washington soon, while he also spoke with US President Biden and thanked him for help in the hostages deal.
Ukrainian President Zelensky sees a higher likelihood for the war to end in 2025.
UK and Ukraine are to sign a historic partnership as UK PM Starmer travels to Ukraine to meet President Zelensky, according to Downing Street.
