Banking failures top list of precious-metal investor concerns for 2024, ahead of recession and geopolitical conflict

by | Dec 15, 2023

Tokyo

New research from BullionVault has today revealed almost a third (32.9%) of precious metal investors say they believe the No.1 likely cause for a financial markets crash next year would be banking failures. This is closely followed by an economic recession (31.9%) and thirdly, geopolitical conflict (15.4%). Despite inflation presenting real concern to investors this time 12 months ago, respondents don’t feel strongly about its impact on financial markets in 2024.

If financial markets were to crash in 2024, what would most likely be the cause?%
Banking failures32.9%
Economic recession31.9%
Geopolitical conflict15.4%
High interest rates5.4%
Inflation4.5%
A bubble in AI / tech3.8%
Social unrest3.3%
Sovereign debt crisis2.3%
Terrorist attacks0.4%

                                                                                      Source: BullionVault

That’s the finding of the latest customer survey from BullionVault, the world’s largest precious-metals marketplace now caring for over £3.2 billion of securely stored and insured gold, silver, platinum and palladium for more than 100,000 users worldwide.

Commenting on today’s findings, BullionVault director of research Adrian Ash says:

“While geopolitical turbulence has put a rising floor beneath gold prices so far this decade, investors now see financial and economic instability as the biggest risks for 2024. Physical bullion continues to appeal as a hedge against such turmoil, boosting confidence in gold’s underlying uptrend even at this year’s new record prices.” 

In this latest survey which has been running since 2014, BullionVault polled 2,002 investors, and found respondents typically hold 16.4% of their investable wealth in precious metals. And while they believe banking failures would be the No.1 likely cause for financial markets to crash next year, the No.1 reason they cite for investing in physical bullion is because of underlying currency debasement/inflation (33.9%), just ahead of the need to spread risk and diversify their wider portfolio as a major motive for buying and holding precious metals (32.9%).

The UK gold price in Pounds per ounce has risen 6.9% this year with prices reaching all-time highs in all major currencies except the Swiss Franc earlier in December, beating the previous record high briefly touched during the ‘mini crisis’ in US regional banking in May 2023. 

Looking ahead to 2024, investors using BullionVault say that among the key price drivers for gold and other precious metals over the next 12 months, monetary policy stands out as it did last year at the top of the list (25.0%) followed by geopolitics (22.0%) and government deficits (20.8%).

Says Adrian Ash:

“Rising interest rates plus record-high gold prices have spurred profit taking among some private investors this year. But that selling in gold remains marginal compared to buy-and-hold, and that strategy – now driven by concerns over financial and economic stability – continues to privilege physical bullion as a form of investment insurance, spreading risk across a broader mix of other assets.”

The No.1 reason for investing in bullion 
Inflation33.9%
Diversification 32.9%
Long term bull market14.1%
What will drive precious metals prices next year? 
Monetary policy25.0%
Geopolitics 22.0%
Government deficits 20.8%

                                                                                      Source: BullionVault

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