Johnson Matthey, Gold ETFs Play Role in Lower Precious Price Index


Our precious metals price index makes history for the second time.

MetalMiner’s monthly Global Precious Metals MMI® clocked in at 88 in January, a 2.2 percent drop from 90 in December, matching the index’s lowest reading of all time (first reached in July 2013).

Plummeting gold bullion prices in the US and China, along with a dip in the US silver price, nearly single-handedly drove the monthly index down. However, palladium prices in the US and Japan dropped as well – a two-month trend.

Compare with last month’s trends – here’s our free December MMI® Report.

Palladium Outlook

Although US and Japan prices on the MetalMiner IndX℠ have fallen the past two months, most analysts and market commentators agree that palladium is looking likely for a price rise in 2014.

Much of this is due to supply-side concerns in South Africa and, especially, Russia.

Russia’s famed palladium stockpile looks to finally be dwindling. According to Johnson Matthey, Russia’s 2012 stockpile sales came in at just 250,000 ounces, down from 775,000 in 2011. This year, the firm believes it could be just 95,000 ounces.

For now, steady industrial demand (driven by catalytic converters in gas-powered cars) and the threat of supply disruption continue to have the upper hand and suggest there is more potential on the upside than the down.

A Tough Year for Gold

Obviously the gold story this year was a sad one, prompting certain folks to posit whether bitcoin will overtake the yellow metal as a store of value. Indeed, according to a recent note from ETF Securities, gold ETP assets under management dropped to $76 billion from $147 billion at the start of the year.

However, gold ETP outflows peaked in 2Q 2013, and if gold’s activity at the close of 2013 is any indication, is the market looking up? Prices hit a two-week high today and are headed for the best weekly performance since October – but according to Chen Min, an analyst at Jinrui Futures in Shenzhen quoted by Reuters, “it won’t continue for the remainder of the year as the (Fed) tapering is set to begin and the global economy is improving.”

Key Drivers of the Precious Metals Index

The price of Indian gold bullion fell 8.5 percent, while US gold bullion prices dropped by 3.3 percent this month. Chinese gold bullion prices decreased by 2.1 percent.

* Get the complete prices every day on the MetalMiner IndX℠

Japanese palladium bar fell 1.5 percent. US palladium bar was down 1.4 percent for the month. Chinese silver prices dropped by 1.0 percent. The value of Chinese palladium bar weakened by 0.6 percent this month. US silver closed the month by dropping 0.5 percent.

However, the price of Japanese silver jumped 3.2 percent last month. Japanese platinum bar prices inched up 1.8 percent. After a 0.4 percent increase, US platinum bar finished higher. Indian silver recorded a 0.4 percent increase. Japanese gold bullion rose 0.2 percent. Chinese platinum bar held pat.

Don’t forget to read December 2013 MMI analysis before January’s full report comes out next week!

The Global Precious Metals MMI® collects and weights 14 global precious metal price points to provide a unique view into precious metal price trends over a 30-day period. For more information on the Global Precious Metals MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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