Precious Metals Weekly Round-Up: Trade Deal Uncertainty Moves Gold Higher

The gold price remained above US$1,460 an ounce Friday morning (November 22) supported by concerns a trade deal may not be as close as previously thought.

The yellow metal spent the majority of the week in the US$1,465 range. However, on Wednesday (November 20), the price climbed more than US$9 an ounce to end the week as the only precious metal in the green.

The surge in price for the safe haven metal is likely a result of the US Congress passing two bills aimed at supporting human rights issues in Hong Kong.

The legislation, which still needs to be approved by the White House, was immediately condemned by China. According to local media, Beijing has warned of retaliation if the US doesn’t stop meddling in the country’s “internal affairs.”

An official in Hong Kong was also critical of the American bill — Commerce Minister Edward Yau Tang-wah reportedly called the measures “unwarranted and unnecessary,” saying it “adds fuel to the fire.”

US President Donald Trump took a diplomatic approach when appearing on Fox and Friends Friday morning, declining to comment on whether he would sign the bills.

“We have to stand with Hong Kong, but I’m also standing with President Xi,” Trump said in the interview.

The president’s metered response paired with renewed optimism around favorable deal talks was widespread when markets opened Friday, helping Wall Street tick higher.

Gold was trading for US$1,465.90 an ounce as of 10:28 a.m. EST while its sister metal silver was unable to break past US$17.19, its highest point for the week.

Silver prices retained stability in the US$17 range for the five-day period before dipping to US$16.98 after the morning bell.

The white metal reacted to the positive tariff talks, leaving silver in the red.

Like the other precious metals, silver has also gained a double digit uptick year-to-date, climbing 12 percent. Still, it has been slightly outpaced by gold, which is up 14 percent.

A silver ounce was selling for US$17.03 at 10:00 a.m. EST Friday morning.

As the price of gold and silver experienced more movement, platinum remained steady, hovering at the US$900 mark before dropping 2.6 percent after markets opened.

The price of platinum has enjoyed a double digit gain over the last 12 months, albeit a less dramatic one compared to palladium. The grey metal has climbed 12 percent year-to-date and is poised to remain balanced for the rest of year.

According to a recent report from the World Platinum Council, record growth in platinum ETFs resulting in a 12 percent increase in demand.

“Stellar investment demand performance is the highlight of 2019,” WPIC CEO Paul Wilson said. “The particularly strong investment demand in the first half of 2019 continued in Q3 and into Q4 with the increase in ETF holdings of 1 million ounces (moz) the highest seen since physically backed platinum ETFs were launched in 2007.”

Palladium spent the morning sliding dramatically, losing US$18 before the start of trading.

The industrial platinum group metal had been on track to break a previous high set at the end of October. Nonetheless, prices are up more than 40 percent year-to-date propelled by strong demand in the automotive sector.

Mounting concern that the auto industry may look to alternative metals for catalytic converters to combat rising palladium prices may be weighing on the metal’s sentiment. However, most auto and metals analysts agree that it would be a very complex undertaking to switch, and a more efficient alternative is improbable.

Palladium fell to US$1,731.50 at 10:46 a.m. EST.

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