Precious Metals

VIDEO - Palladium Hits All-time Highs, Other Precious Metals Neutral

Precious Metals

In this October update, INN looks back at how precious metals fared for the month and what industry experts are saying about the sector.

In this video, the Investing News Network (INN) looks at the key events and developments that took place in the precious metals space this past month.

It’s been an exciting few months for the precious metals sector, but the metal of the month for October was undeniably palladium, which reached two all-time highs during the period.

In mid-October, the metal hit US$1,784 per ounce; then, a week later, it climbed to just above US$1,800.

Increased demand from automakers, which use 80 percent of all produced palladium in emissions-reducing catalytic converters, has been credited for the price bump. More rigorous rules around exhaust emissions and the environment mean the efficiency of the converters must be steadily ramped up.

INN spoke with Jim Gallagher, president and CEO of North American Palladium (TSX:PDL,OTC Pink:PALDF), at the Denver Gold Forum in late September. The head of the Canadian miner said he believes market constraints will drive prices even higher.

“It’s a tight market moving forward for the next couple of years,” he said. “So potentially even though we set records last week at an over US$1,600 closing price … we expect that that price is going to continue to go up, perhaps for the next two years.”

A few weeks later, news broke that Impala Platinum (OTC Pink:IMPUY,JSE:IMP) will purchase North American Palladium for C$1 billion.

In the gold space, the price spent the first half of the month slipping below the US$1,500 per ounce mark. On October 21, the yellow metal reached its lowest point in 60 days when it was selling for US$1,483.

Early in October, INN spoke with US Global Investors (NASDAQ:GROW) Portfolio Manager and Senior Mining Analyst Ralph Aldis about how the sector is performing and about his top gold and silver picks.

The seasoned analyst said he believes silver is going to experience some price growth due to its close correlation to gold.

“Silver has not been performing, at least for the first half of the year,” he said. “It was not doing very well related to gold, which meant a lot of the silver stocks were doing about half as good as the gold stocks.”

However, silver was able to turn it around in Q3, gaining more than US$4 between July and September. The white metal began gaining more traction in mid-October and has continued that momentum.

The platinum space was less active in October, but there were some major developments. As mentioned, Implats entered a billion dollar deal to acquire North American Palladium.

Early in the month, INN spoke with Neal Froneman, CEO of sector major Sibanye-Stillwater (NYSE:SBGL), about the company’s share price rerating.

“I think we can tick the boxes to having addressed our safety issues. I think we can tick the box on the strike because the (Lonmin) transaction has closed,” he said. “And therefore there should be a significant increase in our earnings in the last half of this year and certainly going into next year, which is obviously very important to investors. I think the key message is that we are on the cusp of a rerating in our share price, and clearly we look forward to that.”

Lastly, despite an ongoing dispute with locals in South Africa, Sylvania Platinum (LSE:SLP) reported a positive first financial quarter, with net revenues climbing 51 percent for the reporting period.

Don’t forget to follow us @INN_Resource for real-time updates!

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.

The Conversation (0)


S&P 5004206.04+0.59


Heating Oil2.28-0.08
Natural Gas2.31-0.10