Metals Weekly Round-Up: Gold Moves Higher as Recovery Stalls

Gold faced some headwinds this session, leaving gains muted, but poor data paired with a pressured US dollar helped the yellow metal rally late in the week.

The other precious metals are on track to end the week in the red; meanwhile, the base metals sector has faced similar challenges, prohibiting the space from locking in gains.

After slipping to US$1,938.50 per ounce on Thursday (September 17) — a three-week low — the yellow metal was climbing back towards US$1,950 on Friday (September 18).

Reports that US jobless claims topped 30 million in August bolstered the metal’s appeal late in the week.

Despite the slight reversal made by the yellow metal, Chris Vermeulen of TheTechnicalTraders.com believes there is still upside and discussed where he expects to see the gold price go.

Listen to Vermeulen discuss the gold space above.

“It’s been pulling back in a very controlled technical pattern known as a bull flag. Bull flags are a continuation pattern — you’re expecting a move of equal size continuing higher from this pattern,” he explained to the Investing News Network in an interview.

“We’ve got a really nice move on this chart. I think we could see US$2,200, US$2,400 sooner than people think. This pattern is just on the cusp of breaking out this week.”

At 10:57 a.m. EDT on Friday, an ounce of gold was trading for US$1,953.57.

Silver’s performance this week was also punctuated by volatility. The white metal trended higher from mid-August until September 11, but then shed some 2 percent and fell to US$26.64 per ounce.

This week, silver spiked back above US$27 on Tuesday (September 15) before dipping back to US$26.52.

Analysts see more price growth ahead for silver. At the inaugural SilverFest, held online from September 11 to 13, a panel of silver experts discussed the metal’s performance and which stocks to watch.

“There are probably a lot of people that think this is the top in gold and silver,” said Chris Marchese of GoldSeek and SilverSeek. “After 2011, many people are very hesitant to enter the market — so you know, it’s kind of a waiting game.”

Peter Spina, also of GoldSeek and SilverSeek, elaborated on Marchese’s point, noting that there were run-ups in 2011 and 2016 that then collapsed.

“It’s a lot easier to be a new investor in the silver-mining stocks right now than it is to have been through the last 10 years because you’ve just become so skittish,” said Spina.

Silver was priced at US$26.89 as of 11:34 a.m. EDT on Friday.

Platinum was on track to end the week in the red after prices broke a three week high, hitting US$968 per ounce before plummeting as low as US$920.

An uneven recovery in China’s auto sector is credited with the dip in platinum prices, while the same industry is responsible for palladium’s recent price surge.

Despite the recent volatility, platinum is in its pre-pandemic range, but still shy of its year-to-date high of US$1,022. Platinum was moving for US$924 on Friday at 11:39 a.m. EDT.

As mentioned, palladium prices have been supported by China’s recovering automotive manufacturers.

On Monday (September 14), the autocatalyst metal was selling for US$2,206; a mid-week surge took prices north of US$2,289 before pressure sent the metal lower. At 11:42 a.m. EDT on Friday, an ounce of palladium was valued at US$2,213.

Copper hit a two year high this week of US$6,813 per tonne. However, the metal’s gain was short-lived, and it fell below US$6,800 shortly after.

During a digital event held by Euromoney’s Global Investor Group, panelists discussed the potential for a commodities supercycle coming out of COVID-19.

While experts were hesitant to say that will happen, they did note that copper and nickel could see significant upticks as a result of automation, electric vehicles (EVs) and robotics.

“An EV requires four to five times more copper than an internal combustion engine vehicle,” said Saad Rahim of Trafigura, as per Recycling Today.

He went on to note that stimulus efforts in Europe and China will be “copper intensive.” Rahim said, “We’re looking for that incentive price to come in (to spur mining projects, or) there is a deficit that starts to emerge in mined supply.”

Copper was priced at US$6,761 on Friday morning.

Nickel shed some of the gains it made early in the week, slipping from US$15,090 per tonne on Monday to US$14,895 by Friday.

Zinc also made strides mid-session, climbing to US$2,505 per tonne. It’s expected that prices for the both zinc and lead could spike in the weeks to come due to news that base metals producer Central Asia Metals (LSE:CAML) will curtail production due to a tailings dam leak.

The shutdown will cut some 400 to 500 tonnes per week of zinc-in-concentrate and another 500 to 600 tonnes per week of lead-in-concentrate. The shutdown comes as the Chinese economy continues to recover from COVID-19-mandated lockdowns.

On Friday morning, zinc was priced at US$2,454.50. Lead was valued at US$1,858 per tonne, a slight dip from Monday’s US$1,873.50.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.