Metals Weekly Round-Up: Precious Metals Perform Positively

The gold price surpassed US$1,900 per ounce briefly this week for the first time since January.

Edging as high as US$1,909 on Wednesday (May 26), the yellow metal immediately encountered headwinds from positive economic data out of America, as well as rising 10 year Treasury yields.

After reaching an all-time high last week, palladium continued to reach new record highs this session. News that a supply deficit may grow continued to support prices.

Economic recovery efforts in 2021 have countered some of gold’s gains. Although values have remained below US$1,900 for the majority of the year, Byron King anticipates another mid-year price bump.

“Last summer we saw gold over US$2,000 an ounce. I expect we’re going to see the same thing again this summer,” King told the Investing News Network (INN).

Watch King discuss factors that could lead to a value increase for gold.

King, who writes Whiskey & Gunpowder for St. Paul Research, which is part of Agora Financial, believes continued overspending and poor fiscal policy will be catalysts for gold’s ascent.

In his opinion, the metal’s muted performance of late is an opportunity for investors “to pick up some more at reasonable prices while you can.”

An ounce of gold was valued at US$1,893.23 at 11:26 a.m. EDT on Friday (May 28).

Silver touched a three month high of US$28.16 per ounce this week. As the metal neared the US$30 mark, the gold/ silver ratio rose to a multi-week high of 70. The ratio has since slipped slightly lower, and Metals Focus sees it declining to the low 60s during Q3 and Q4.

The consultancy expects silver’s dual nature to propel the metal higher in the second half of the year.

“Investors also appear to remain friendly to silver through both the super-cycle argument for the whole commodity complex and for silver’s ability to benefit from the wave of green investment,” a weekly report from the firm reads. “Against this backdrop, given the smaller size of the silver market, silver should outperform to the upside.”

An ounce of silver was trading for US$27.77 as of 11:27 a.m. EDT on Friday.

The platinum price rose to US$1,203 per ounce this week, another three month high, before plummeting back to the US$1,170 range. As mentioned, palladium continued its record-breaking price performance, registering a fresh all-time high of US$2,735 per ounce. Tailwinds from the auto sector are projected to keep demand for both metals growing, with platinum taking a slight edge.

“Platinum automotive demand will rise by 24 percent (in 2021),” Trevor Raymond, director of research at the World Platinum Investment Council, told INN.

“That’s mainly because of higher loadings per vehicle to meet target emissions (mainly Euro 6 and China 6a guidelines), and increasing platinum substitution for palladium in gasoline autocatalysts.”

Platinum was at US$1,166.25 and palladium was at US$2,724 as of 11:00 a.m. EDT on Friday.

The base metals were able to broadly move higher over the five day period following a period of correction last week.

Issues in the Democratic Republic of Congo around the export of copper and cobalt concentrates helped the red metal rally from US$9,868 per tonne on Monday (May 24) to US$10,032 by week’s end.

Cobalt will feel the brunt of the impact from the government-mandated export ban, but the country has been increasing its copper production recently.

“The export ban comes immediately after production commenced at Kamoa-Kakula, which will increase (the country’s) copper in concentrate production by 200,000 tonnes per year,” a Roskill report notes.

Copper was holding at US$10,032 on Friday morning.

Zinc prices approached US$3,000 a tonne late in the session, but were unable to break through. Values ended the last full week of May at the US$2,994 level.

After dipping below US$17,000 briefly, a 3.4 percent push sent nickel values north of US$17,300. Healthy demand from a variety of segments is projected to keep prices on the uptick over the long term.

“Demand is expected to recover through 2021 subject to the roll out of vaccines globally and national stimulus packages taking effect,” a Roskill market overview reads. “(The firm expects) stainless steel to remain the main application for nickel over the course of the next decade driven by continued growth in demand from China.” Nickel was trading for US$17,364 on Friday morning.

Lead made a modest move to end the month, adding US$50 to its Monday starting value. By Friday, lead was holding at US$2,182.50 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.