Precious Metals

Precious Metals Investing

Gold broke past US$1,580 when markets opened on Friday, but the yellow metal slipped back later during morning trading.

Gold broke past US$1,580 per ounce when markets opened on Friday (February 14) after spending the week steadily edging higher. The yellow metal then began to ease back weighed down by a strong US dollar and heightened enthusiasm for equities driven by international efforts to curb COVID-19.

Silver also hit its highest point for the five-day period early this morning when it topped US$17.68 per ounce. Despite lagging gold for the last year, a report from The Silver Institute this week painted a shiny picture for the white metal’s performance this year.

This week was also marked by a positive performance from palladium, which moved above US$2,300 per ounce, breaking its previous all-time high.

After spending January in the green with consecutive gains, February has proven more volatile for gold, although the metal has been able to retain a 0.3 percent gain made during the first two weeks of the month.

While gold’s momentum may have stalled slightly, the currency metal has climbed 19 percent in the last year from US$1,321 to US$1,578, highlighting its growing importance in a world ripe with precariousness.

“I am a believer in values: as in, anything appreciates or depreciates against a landscape of alternatives,” Thom Calandra of the Calandra Report said via email. “Gold at US$1,600 or just beneath is maintaining good purchasing power for most goods. Especially overseas, where gold is at all-time highs.”

The market watcher sees growing global uncertainty benefiting gold throughout the year.

“Keep an eye on how cryptocurrencies rise as safe haven gold rises,” he said. “Also I expect at some point in the next year or two we will see an ‘edict’ by a nation or nations that benefits gold, or the buying of gold or reserving of gold at central banks.”

Gold was trading for US$1,581.25 as of 11:13 a.m. EST Friday (February 14).

As its sister metal spent January edging higher, silver spent the same period falling back. The white metal finally broke free of its descent this week, peaking at US$17.80 on Monday (February 10).

A report from The Silver Institute forecasts the metal breaking out of its range bound levels this year driven by increased industrial application and a growing appetite for physical silver.

“The outlook for silver remains positive, with the annual average price projected to rise by 13 percent to a six-year high of US$18.40 in 2020,” the report notes. “This rally is premised mainly on a positive spill-over from gains in gold, as the yellow metal will continue to benefit from macroeconomic and geopolitical uncertainties across critical economies.”

The gold-silver ratio is expected to correct itself, dropping from the high 80s to the mid-to-high 70s.

An ounce of silver was moving for US$17.77 at 11:12 a.m. EST.

Platinum was also impacted by the broader volatility, dropping as low as US$954 an ounce on Monday (February 10). The grey metal rallied before markets opened on Friday, surging to US$973; however, it slipped back to US$963.

Since hitting US$980 during the first days of the year, platinum has been locked in a downward trend, keeping the metal mostly in the US$960 to US$970 range.

As of 11:12 a.m. EST, an ounce of platinum was selling for US$962.

Although the other publicly traded precious metals experienced headwinds this session, palladium’s price growth continued, with the automotive metal climbing 1.5 percent this week.

The platinum group metals commodity surpassed the US$2,300 an ounce mark on Wednesday (February 12) and continued its upward trend in pre-trading hours on Friday when the price reached US$2,335.

Palladium’s meteoric ascent over the last year is tightly correlated to increasingly strict car emission standards in Europe and China, prompting auto manufacturers to up the amount of the emissions-reducing metal used in catalytic converters.

Palladium was changing hands at US$2,298 as of 10:57 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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