Metals Weekly Round-Up: Historic Gold and Silver Rally Continues

Precious Metals

A weak US dollar and a steady uptick in America’s new COVID-19 cases sent investors to safe havens, ultimately benefiting gold and silver.

Gold continued to trend higher this week breaking its previous all-time high. A weak US dollar and a steady uptick in America’s new COVID-19 cases sent investors to safe havens, ultimately benefiting gold and silver.

Poor economic data is painting a bleak picture for economic recovery as many analysts begin to realize the rumored V-shaped recovery will not materialize.

The yellow metal started the session firmly planted above US$1,900 per ounce. By mid-week the metal had reached US$1,970 and was still strengthening.

In pre-trading hours Friday (July 31) the price hit US$1,980 nearing the US$2,000 threshold.

“I’ve been of the view that gold is set for a repricing into the US$2,000 to US$3,000 range — and this was last year, well before COVID-19 hit,” said John Kaiser of Kaiser Research.

Watch the video above to hear from Kaiser on gold’s price activity.

He added: “The COVID-19 pandemic has created enormous global stresses which are accelerating the need for gold to go into the US$2,000, US$3,000 range. I wasn’t really expecting it to break through until 2021, but I think we’re on the threshold.”

At 10:32 a.m. EDT, an ounce of gold was selling for US$1,965.58.

Silver also performed positively this week, reaching price territory unseen since 2013.

The white metal moved from its Monday (July 27) start price of US$24.10 per ounce to a seven-year high of US$25.89, prompting many to speculate how high the metal will go.

“(Silver will) go up close to US$30 before there’s any trouble,” EB Tucker, director at Metalla Royalty & Streaming (TSXV:MTA,NYSEAMERICAN:MTA) told INN.  “Then you’ll have some sort of pause and I don’t know we’ll have to see what it looks like there.”

Listen to EB Tucker discuss the current opportunity in precious metals.

As industrial demand has shrunk, exchange traded fund demand has helped the metal add to its value during the first half of 2020.

Silver was selling for US$23.95 as of 10:42 a.m. EDT.

Platinum faced some challenges this session, which weighed on its ability to lock in gains. A brief mid-week rally saw the price top US$951 per ounce.

However, the price faced pressure from declining consumer demand in the auto sector and pulled back.

By Friday (July 31) morning the price was US$896.

The palladium story was similar this week, as the weakened auto sector continues to grapple with a host of transport and logistical issues.

A mid-week high of US$2,2267 per ounce brought the metal back to pre-pandemic levels. The rally then reversed as the price fell below US$2,000.

As of 10:48 a.m. EDT palladium was trading for US$1,986.

Despite weak economic information from America, copper was able to hold above US$6,400 per tonne this session.

The price has continued to strengthen over the last three months thanks to improved demand from China.

“This is almost entirely due to a remarkable bounce-back in Chinese demand, as policymakers there moved to stimulate activity — particularly in the copper-intensive infrastructure sector,” Kieran Clancy of Capital Economics, told INN.  “And with that support set to be stepped up in the months ahead, a further pick-up in Chinese demand will probably remain the key driver in the second half of the year.”

On Friday morning copper was moving for US$6,433.50.

Zinc edged higher this week to a six-month despite surplus levels rising at the London Metals Exchange warehouse.

The stockpile may weigh on prices later in the quarter, however for now investors continue to believe in the sector.

Zinc was valued at US$2,275 per tonne on Friday.

Nickel prices continue to fell pressure. A 1.8 percent price slip mid-week brought the metal to US$13,470 per tonne.

“Low demand has resulted in the market switching to surplus and a swelling of stocks,” Roskill Senior Analyst Jack Anderson said.  “We anticipate the price to improve a little through H2 2020, supported by a partial demand recovery, especially in China.”

Nickel was selling for US$13,716 on Friday.

Lead made some minor gains over the five-day period. Despite edging higher lead is still 18.7 percent off its year-to-date high of US$2,265 per tonne and expected to face continued headwinds from the demand side.

On Friday morning lead was priced at US$1,841.50.

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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.

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