Metals Weekly Round-Up: Gold Price Passes US$1,800

- July 10th, 2020

Gold breached the US$1,800 threshold on Wednesday, trending as high as US$1,814 and prompting many to speculate on where it will go next.

Gold breached US$1,800 an ounce on Wednesday (July 8), trending as high as US$1,814.

A weakening US dollar and a retreat from risk sentiment helped the yellow metal hit its highest value since 2011. The broader precious metals space benefited from the rally, with all constituents positioned to end the week in the green.

After climbing 9.7 percent during Q2, gold is on track for a fifth straight week of gains. Since July 1, it has added 2.4 percent to its value.

The yellow metal has not been in the US$1,800 range since mid-September 2011.

During an interview with the Investing News Network (INN), Andrew O’Donnell, managing director of SuperCharged Stocks, highlighted the value opportunity that the present uncertainty has created.

“We’re sitting in a period of time in which you could literally make generational wealth right now, and it has been like that with any of these massive upheavals or shifts in time,” he said.

Watch the full O’Donnell interview above. 

He added, “Even if we go back to the Great Depression, the vast majority of people suffered and did not do very well. But believe me, that top 10 percent made out like bandits.”

At 10:14 a.m. EDT on Friday (July 10), gold was priced at US$1,803.05.

Silver was also able to rise this session, increasing by roughly 2.2 percent. While the white metal’s fundamentals differ from those of gold, safe haven demand has worked in its favor.

Diminished industrial demand has weighed on silver, and the lifting of lockdowns and factory restarts have yet to propel the metal to its previous levels. Silver is still well off its all-time high of nearly US$50 per ounce, even as its sister metal inches higher.

Silver was trading for US$18.66 at 10:23 a.m. EDT on Friday.

Platinum rose above US$850 per ounce this week. The move marked the first time since May that the metal had surpassed that threshold.

But the ascent was short-lived, with the catalyst metal falling to US$814 at midday on Thursday (July 9).

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A recent report from the World Platinum Investment Council showcases Germany’s decarbonization goals. The group expects the use of fuel cell electric vehicles (FCEVs), which require platinum, to be a key component in the German strategy.

“Platinum in FCEVs is currently a small, but growing, demand sector for platinum, with near-term demand growth coming predominantly from the heavy duty sector, with the potential for significant demand once fuel cell passenger cars move beyond one per cent of annual vehicle sales,” it reads.

The platinum price was at US$832 as of 10:49 a.m. EDT on Friday.

Palladium made a large leap this session, jumping to US$1,934 per ounce on Thursday. The 4 percent surge over one day was later reversed when the metal pulled back to US$1,880.

Now back above US$1,900, palladium has climbed 5.5 percent since Monday (July 6). By Friday at 10:53 a.m. EDT, an ounce of palladium was selling for US$1,914.

The first full week of July was positive for base metals as well. Copper started the period at US$6,112 per tonne and was up 3 percent by the end of week.

Supply and demand chains continue to be impacted for the red metal, which could justify a move to US$7,000, according to one market watcher.

“Visible copper inventories are down by an astounding 33 percent year-on-year, copper concentrate treatment and refining charges have narrowed to the lowest level since 2012 and CIF Shanghai cathode premiums hit a two-year peak last month,” said Benedikt Sobotka, CEO of Eurasian Resources Group.

Sobotka added, “The evidence points to a tight market, which justifies the current price level.”

At 11:00 a.m. EDT on Friday, copper was valued at US$6,339.50.

A modest gain was also seen in the zinc space as prices steadily moved up. But a week of positive price action was still not enough to pull the metal to its pre-COVID-19 high of US$2,466 per tonne.

And according to analysts, the metal may face other challenges as the year progresses.

“We do not rule out further price-related cutbacks at the margin, but not to any degree that would make a further significant dent to zinc production,” Karen Norton of Refinitiv said to INN.

“For zinc, the COVID-19 impact may have accelerated the process of curtailing output in a deteriorating market environment.”

As of Friday at 11:43 a.m. EDT, zinc was trading for US$2,132.50.

Nickel saw a 1.3 percent increase this period, marking a year-to-date high for the metal. Now at the US$13,400 per tonne level, nickel remains far from its one year high of US$18,620. Presently nickel is selling for US$13,425.

A rally in lead prices pushed the metal above US$1,800 this week. Five days of steady gains helped push lead back to its pre-pandemic price, and a 2 percent uptick allowed the base metal to end the week trading at US$1,817.50 per tonne.

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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.

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