Metals Weekly Round-Up: Gold Hits 7 Year High, Then Retreats

The gold price enjoyed another week of gains — mixed sentiment had some investors storing the safe haven, while others opted for more risk.

Edging closer to US$1,800 per ounce mid-week, the yellow metal hit a seven year high on Wednesday (July 1), when it rallied to US$1,788.90. Gold futures passed the US$1,800 mark this week.

The first week of the third quarter also saw silver in the green, while platinum struggled and lost ground. The base metals were a mixed bag, with all but lead trending higher.

Having added over 1 percent to its value this session, gold is expected to hold above US$1,750 on steady increases to total global coronavirus tallies.

“Central bank easing policies and uncertainty surrounding the second wave (of COVID-19) are sustaining gold prices,” Bank of China International analyst Xiao Fu told Reuters.

Similarly, Rick Rule of Sprott (TSX:SII,NYSE:SII) pointed to quantitative easing, low interest rates and rising government debt and deficit levels as motivators for the gold price. The well-known investor also noted that precious metals are the place to be now, but that could change in the long term.

Watch the full interview with Rule above. 

“I think the message to investors and speculators … is precious metals now, but get ready for — two years from now, three years from now, four years from now — a stupendous rally in industrial commodities,” Rule told INN.

At 11:35 a.m. EDT on Friday, an ounce of gold was valued at US$1,774.90.

Silver also spent the period in the green, on track for a fourth week of gains. The white metal broke the US$18 per ounce threshold on Tuesday (June 30). Rising to US$18.40, silver has now achieved pre-COVID-19 lockdown price territory.

After dipping below US$18 briefly on Thursday (July 2), silver is progressing towards a month of steady gains. An ounce of silver was trading for US$18.04 at 11:36 a.m. EDT on Friday.

Platinum also performed positively this session following a month of declines. On Wednesday, the catalyst metal climbed as high as US$822 per ounce, its highest value since May 21.

During a CPM Group webinar this week, Jeffrey Christian forecast a platinum price range of US$855 to US$875 for the remainder of the year.

“Our expectation is that the price will continue to trade in this range for awhile,” he said. “We do see scope for higher platinum prices in the future, but frankly it could be a couple of years from now before we see that.” As of Friday at 11:40 a.m. EDT, platinum was priced at US$798 an ounce.

Palladium was also in the green on Friday morning (July 3), after trending lower for most of June. Prices had been slipping since mid-May, falling as low as US$1,799 per ounce.

While platinum is projected to add to its value, CPM Group’s Rohit Savant expects palladium prices to be rangebound in the long term.

“We don’t necessarily see a sharp decline in prices,” Savant said. “But we are unlikely to see a run-up in palladium prices like we have over that last few years.”

Palladium was moving for US$1,864 at 11:40 a.m. EDT on Friday.

In the base metals space, copper pulled ahead this week as industrial demand in China experienced a reinvigoration. Starting the week at US$5,957 per tonne, the red metal had added just over 2 percent to its value by the end of session.

Lower-than-expected job loss data out of the US also helped prop up prices of the industrial metal. Copper was trading for US$6,080 on Friday.

Zinc faced some headwinds, causing volatility in the price. Despite the value movement, Ryan Cochrane of Open Mineral told INN he is surprised prices have exhibited the resilience they have.

He foresees a renewed appetite for the metal as countries move ahead with reopenings.

“(I) would certainly expect a gradual improvement in demand as economies gradually ease lockdowns. Particularly from Europe and North America and ongoing improvements in China,” he said.

Zinc was priced at US$2,035 per tonne on Friday at 10:45 a.m. EDT.

Following a mid-week dip that saw nickel fall to US$12,555 per tonne, the metal was able to regain lost ground to end the week higher.

On Friday at 10:50 a.m. EDT, nickel was selling for US$12,823.

Lead was the only base metal to end the week in the red. Starting the first week of July at US$1,783 per tonne, the price fell to US$1,761 mid-session.

By the end of the week, lead had edged slightly higher, but was still below its Monday (June 29) value. Lead was priced at US$1,765.50 on Friday at 10:53 a.m. EDT.

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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.