Metals Weekly Round-Up: Market Positivity Negative for Gold

Gold continued to trade below US$1,900 per ounce this week, held down by positive news on the COVID-19 vaccine front. The yellow metal also faced pressure after the US Department of the Treasury made an announcement about ending emergency loan programs.

Facing three months of price pressure, gold was on track for its second week of declines below the key US$1,900 threshold. The rest of the precious metals had better performances during the period, with platinum adding as much as 8 percent to its value this week.

As stocks rallied over reports that Moderna (NASDAQ:MRNA) is advancing its COVID-19 vaccine, the gold price slumped, dipping to a low of US$1,856.30.

Some risk-on sentiment waned when key lending programs in the US were given an expiration date of December 31, 2020, by US Treasury Secretary Steven Mnuchin. Following the announcement, doubts rose around the future of stimulus and fiscal support.

Despite the recent trends and vaccine pressure, Independent Speculator Lobo Tiggre sees gold’s fundamentals as more nuanced.

“It was predictable because there was a narrative throughout the year — much of the year, at least since March — that it was the COVID-19 situation that was pushing the fear button and pushing people into gold and silver. I don’t think that’s true at all,” Tiggre told the Investing News Network.

Watch the entire interview with Tiggre above.

He continued, “Gold’s been on a rise for years now really, and on a more marked rise since the Powell pivot in late 2018. So this started way before COVID-19 — and maybe the COVID panic is an extra boost, a tailwind. But the disappearance of the tailwind doesn’t undo the fundamental situation for the market.”

At 10:05 a.m. EST on Friday, gold was priced at US$1,877.03.

The silver price rose sharply on Friday (November 20) morning, recovering some early week losses. Starting the session at US$24.53 per ounce, the value of the white metal had slipped 3 percent by Thursday (November 19).

The metal’s ability to retain its value amid the headwinds gold is experiencing underline positive fundamentals moving forward.

“The silver market is just one step away from another MASSIVE BUYING WAVE and is just waiting for the next leg to drop in the global economy and financial system to do so,” wrote independent researcher Steve St. Angelo of the SRSrocco Report.

“With silver investment demand to account for nearly 75 percent of the global mine supply this year, if we experience the same type of demand next year, we will enter a silver market like never before.”

The white metal was valued at US$24.41 as of 10:14 a.m. EST on Friday.

The price of platinum has been edging higher since the morning bell rang on Monday (November 16). Adding as much as 8.2 percent, platinum has pulled back slightly but remains above US$950 per ounce.

The recent price activity has been propelled by a decrease in platinum output, likely to be compounded by Anglo American Platinum’s (LSE:AAL) closure of the Phase B unit at its convertor plant in South Africa.

“Developments in quarter three, including the V-shaped recoveries in automotive markets, pandemic-related risk driving precious metal investment demand and severely reduced supply, have all contributed to the expected 1.2 million ounce deficit in 2020 and 224,000 ounce deficit in 2021,” notes a report from the World Platinum Investment Council.

Platinum was selling for US$951 at 10:23 a.m. EST on Friday.

After making steady gains since the beginning of the month, palladium faced volatility this session. The headwinds prevented any gains from locking in and aided in a dip below US$2,200 per ounce.

By Friday, the metal was fluctuating just above US$2,200. Palladium is poised to perform well on the back of similar drivers in the platinum market. At 10:54 a.m. EST on Friday, it was moving for US$2,194.

The base metals sector also faced difficulties this week, but managed to mitigate losses.

“The base metals remain upbeat despite some hesitation in major equity indices and that suggests investors are still focused on the outlook for demand that should be boosted by infrastructure spending,” notes a Fastmarkets overview.

“Our concern remains that prices may have run ahead of the fundamentals and be vulnerable to a correction if equities turn from consolidating to weakness.”

Copper started the week trading at US$7,113 a tonne and fell lower over the period. Prices declined 1 percent by Thursday, and copper was selling for US$7,028 on Friday morning.

Nickel also faced challenges, dropping 2 percent on Tuesday (November 17). Following a small rally on Wednesday (November 18), prices slipped to US$15,690 per tonne a day later. Nickel remained at that level on Friday.

Two base metals were able to squeak out gains this week: zinc and lead.

Starting the period at US$2,653 per tonne, zinc had climbed as high as US$2,732.50 by mid-week. By week’s end, the metal was holding at US$2,721.

Lead also edged higher, adding 3.6 percent to its Monday value of US$1,882.50 per tonne. Lead has consistently moved higher since November 11, adding 7.3 percent to its worth. On Friday morning, lead was priced at US$1,951.

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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.