Precious Metals Weekly Round-Up: Platinum Climbs, Surpasses US$1,000

The precious metals sector was divided this week, with gold and silver remaining range bound, while platinum and palladium climbed.

The price of platinum was up 4.4 percent from last week, exceeding US$1,000 per ounce for the first time in two years. The precious metal had been sidelined for much of the growth palladium and gold experienced in 2019, and is now starting to benefit from the same motivators.

Rallying from US$976 (January 10) to US$1,037 (January 16), the grey metal exhibited its best performance year-to-date and remains on track to surge to highs unseen since 2015.

Following a poor performance for much of 2019, when the price remained below US$950 and dipped lower than US$800 briefly, platinum has begun 2020 with strong momentum holding above US$960.

The newly signed phase one trade deal between China and the US countered some of the volatility brought into the market earlier in the month and renewed some of the investor risk appetite that had been focused on safe haven assets.

The exchange traded-funds sector (ETF) could also motivate the metal. Last year, platinum ETFs grew by 12 percent in 2019, with investors purchasing 90,000 ounces or 11 percent of global supply.

Platinum was trading for US$1,018 an ounce at 10:22 a.m. EST on Friday (January 17).

Easing geopolitical tensions came as a headwind for gold, keeping it on course to record its weakest performance in two months.

News of the phase one deal did not help the yellow metal, which dropped below US$1,550 following the announcement.

However, gold was able to rebound supported by a weaker equity market and lower US dollar.

A report from the World Gold Council released this week highlighted the possibility for heightened volatility in the sector amid ongoing geopolitical tensions and weakening economic growth.

“We don’t anticipate a reduction in gold volatility near term,” it reads. “Should the economic and political environment deteriorate, it may even rise, especially as gold volatility historically exhibits a positive skew in such circumstances, tending to increase as stocks pull back.”

Another round of increased buying from central banks and monetary policy are also projected to impact the value of gold in 2020.

The yellow metal sat at US$1,555.60 an ounce at 10:56 a.m. EST.

Palladium continued its upward trend this week, climbing by 14 percent to trade at an all-time high of US$2,429 this morning (January 17).

The price subsequently fell back, slipping below US$2,400.

Palladium’s hyperbolic performance has now moved the industrial metal beyond platinum and gold’s record highs, making it the most valuable of the four exchange-traded precious metals.

“There was no news that could have justified the upswing apart from the good EU new car registration figures that were reported yesterday,” Commerzbank (OTC Pink:CRZBF,ETR:CBK) analysts said in a note.

The German bank pointed to the prolonged supply deficit as the current catalyst behind palladium’s best historic performance.

An ounce of palladium was selling for US$2,391 at 11:17 a.m. EST.

In the silver space, the metal remained locked below US$18 an ounce for much of the week, briefly breaking the threshold this morning before sliding back to its range bound levels.

The grey metal has exhibited the least price growth of the four metals, and the gold/silver ratio remains currently sitting at 86.5.

Silver was unable to end the week with any gains despite spending much of early January just above US$18.

As of 11:26 a.m. EST, an ounce of silver was moving for US$17.90.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.