China-Driven Commodities Supercycle Over, Gold, Silver Prices Dip

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According to analysts at the big banks, the commodities “supercycle” is now finally, officially, for-realsies over.

Jack Farchy and Javier Blas co-report in the FT that “most commodity prices have already fallen dramatically. Since their respective peaks in 2011, copper prices are down 35 per cent, iron ore prices have fallen 40 per cent, and gold has tumbled 36 per cent” – which you’ve hopefully been seeing in our Monthly MMI® metal price trends reports.

“People have generally been positioned for the slowdown in materials demand,” Kamal Naqvi, head of commodity sales at Credit Suisse, is quoted as saying. “But we’re getting towards the end of that particular trade. For metals to be a conviction short from here, clients are waiting on confirmation that demand is worse and/or that supply is better than people have been factoring in.”

This is reflected in our daily precious metals price index:

US palladium bar prices were the only bright spot, rising 0.6 percent. So here’s the bad news for investors (and the good news for metal buyers):

today's metal prices - MetalMiner IndXWith a decline of 5.9 percent on Wednesday, June 26, Indian silver recorded the biggest price drift of the day. After falling 3.3 percent, the price of Japanese silver reached a 30-day low. The price of Chinese silver reached a 30-day low after decreasing 2.6 percent. The price of US silver fell 0.3 percent.

The price of Chinese gold bullion fell to a 30-day low after drifting 3.1 percent. Indian gold bullion ended the day after a 2.5 percent drop yesterday. Japanese gold bullion prices saw a 2.2 percent decline. After falling 0.4 percent, the price of US gold bullion reached a 30-day low.

Just off of a 30-day low of its own, the price of US platinum bar rose 1.4 percent on Wednesday. Japanese platinum bar finished the day down 1.0 percent. Yesterday a price drop of 0.7 percent carried the price of Chinese platinum bar to a 30-day low also.

Japanese palladium bar fell 0.8 percent yesterday. Chinese palladium bar saw little change in its price yesterday.

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