Metals Weekly Round-Up: Palladium Soars on Russian Output Woes

Supply challenges continue to drive the palladium price higher, and the metal registered a fresh all-time high of US$3,052 per ounce this week.

As palladium moved upward, volatility rocked gold, sending it from US$1,788 per ounce on Wednesday (April 28) to US$1,755 less than 24 hours later.

The yellow metal had been on course for its first monthly gain in four weeks, but positive economic data out of the US pushed 10 year Treasury yields higher, a headwind for gold.

After dipping as low as US$1,724.80 on March 1, the safe haven asset was approaching the US$1,800 mark this week before retreating.

During an interview, Will Rhind, CEO of GraniteShares, offered his insight on gold’s turbulent performance over the last month.

“I think what really is going on though is we’re transitioning in terms of this gold market from (last year’s) crisis hedge environment … to gold being not needed as a crisis hedge for the moment,” he explained. “We’re transitioning into an inflation hedge environment.”

Watch Rhind discuss the gold and platinum markets.

The gold price was at US$1,768.10 as of 9:57 a.m. EST on Friday (April 30).

Silver spent most of April sliding lower, but this week values neared the US$26.50 per ounce level.

Although it is closely correlated to gold, silver’s industrial side is anticipated to support a move to US$32 later in the year, according to Metals Focus. The consultancy expects the versatile metal to average US$27.30 for 2021.

At 10:05 a.m. EDT on Friday, an ounce of silver was valued at US$25.99.

Production disruptions at Russia’s Norilsk Nickel (MCX:GMKN) have impacted the platinum and palladium markets, aiding in positive price action for both.

Platinum climbed as high as US$1,246 per ounce on Tuesday (April 27) before declining back to the US$1,182 area. The move brought the metal’s highest and lowest points in the last 60 days.

As platinum prices yo-yoed, palladium rocketed to a new all-time high of more than US$3,000 on Friday. The metal is a primary material in catalytic converters, the emission-reducing component of the exhaust systems used in vehicles.

Both metals can be used in the converters. However, palladium has been preferred as its reduction capacity is slightly better and more efficient. Rising emissions standards in China and the EU have called for increased palladium consumption in the auto space.

Platinum was selling for US$1,202.25 on Friday at 10:17 a.m. EDT. Palladium was moving for US$2,882.

Palladium wasn’t the only metal to soar to new heights for the last week of April. Copper prices ended the session and month by breaching a 10 year high of US$9,990 per tonne.

Prices for copper have been ticking up since the end of March, adding 11.7 percent over the 30 day period.

Copper’s April spike is likely the result of US President Joe Biden’s new decarbonization targets, as well as the global economic recovery.

“The copper price has gone stratospheric and probably has further to go, which is a boon for miners who are currently making at least two dollars for every one they spend getting metal out of the ground,” Robert Edwards, principal analyst at CRU Group, said on Thursday (April 29).

Copper values were holding at the US$9,990 level on Friday morning.

The rest of the base metals also benefited from a promising economic outlook. Zinc entered the final session of April at US$2,862.50 per tonne, and by Friday the metal was trading for US$2,928.

Nickel recorded the second largest gain, adding 5.9 percent to its value by week’s end. Since opening the month at US$16,001 per tonne, nickel prices have soared 8.9 percent to hit US$17,433.

Lead was also up 2 percent over the last week of April, with analysts anticipating more upside ahead.

“Preliminary estimates from the International Lead and Zinc Study Group put the refined lead market in a 30,000-tonne surplus in January-February 2021, in from a sizeable 172,000-tonne surplus overall in 2020,” reads a lead overview from Fastmarkets.

“And while we forecast demand from end-use sectors will rebound through 2021, we also expect higher lead production — we expect the market to record an 80,000-tonne surplus overall in 2021.”

Lead was holding at US$2,097.50 early Friday.

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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.