Precious Metals

Precious Metals Investing

Gold had been on track to mark a record weekly gain, but fell sharply from US$1,685 to US$1,648.11 this morning.  

An interest rate cut on both sides of the Canada–US border meant to support the market and ease concern over the COVID-19 coronavirus helped push gold from US$1,600 to well above US$1,640 per ounce as investors look to hedge against economic uncertainty.

The precious metals took a slight dip following the US Federal Reserve’s emergency rate cut on March 3, but subsequently rallied, with gold losing just over 1 percent or US$18 before climbing back above US$1,640.

Before markets opened today (March 6), the safe haven metal moved as high as US$1,688.40, but dropped just before the morning bell.

Gold had been on track to mark a record weekly gain, but fell sharply from US$1,685 to US$1,648.11 this morning.

Gold was also a major topic of conversation at the 2020 edition of the Prospectors and Developers Association of Canada (PDAC) convention in Toronto this week. Many of the analysts the Investing News Network spoke to were bullish on gold and its safe haven appeal amid a world ripe with uncertainty.

Brent Cook of Exploration Insights forecasts gold will perform well for the next six months to three years, driven by falling markets and geopolitics.

Joe Mazumdar, Cook’s partner at Exploration Insights, sees the current market as a prime opportunity for investors to purchase shares they may have not been able to get previously.

“I would probably look at precious metals stuff that you really like, but you thought was too expensive,” Mazumdar said.

Gold was selling for US$1,659.68 at 10:38 a.m. EST.

Gold’s sister metal silver also experienced a drop in off trading hours. Silver had trended as high as US$17.50 per ounce, then sharply fell to US$17.23 just before 9:00 a.m. EST.

Subsequently, it started to climb higher, clawing back some of the losses.

Silver is also projected for growth in 2020, thanks to some of the same tailwinds pushing gold ahead.

The white metal will have to contend with a drop in industrial demand brought on by COVID-19, but long term the optics for the metal look favorable, according to Brien Lundin, editor of the Gold Newsletter.

The CEO of the New Orleans Investment Conference expects silver to outperform its sister metal in the long term.

“I still think silver (is) a longer-term monetary bull market like we’re in now … Going on to the next few years, silver will outperform gold. It always has in these kinds of markets in the past,” he said.

Lundin explained that silver is an “un-expiring option” on the gold price, giving you leverage to gold by holding a different physical metal.

At 10:39 a.m. EST, silver was trading for US$17.09.

Platinum was able to register some growth this week, starting the period at US$867 an ounce and trending as high as US$900 before settling just below the threshold.

Despite lagging the other precious metals, platinum is forecasted to climb this year supported by heightened exchange-traded fund demand and a potential substitution in the automotive space.

A report from the World Platinum Investment Council (WPIC) this week painted an painted an optimistic picture for the metal in the long term.

“We believe that the fundamental drivers of value for platinum are being more widely considered and that the current investment case for platinum is more compelling than at any time since the launch of the WPIC in 2014,” the market overview notes.

An ounce of platinum was moving for US$891.75 as of 10:39 a.m. EST.

Palladium also had significant after-hours activity. The autocatalyst metal shot from US$2,367 per ounce to US$2,506 before falling back to the US$2,445 range.

After displaying steady growth for the majority of the past 12 months, palladium experienced its most volatile week, which may indicate its meteoric ascent is ending.

On February 26, the platinum group metal recorded its highest price to date, US$2,671, but it has spent all of early March well below that high.

Palladium was trading hands for US$2,387 at 10:40 a.m. EST.

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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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