President Putin Pushing Palladium Prices Higher Singlehandedly?

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Well, maybe the Russian president isn’t solely responsible for the 13-year-high price of palladium, but he’s sure doing his part.

Global-Precious-Metals_Chart_September-2014_FNL

Despite his recent “cease-fire agreement” with Ukrainian President Petro Poroshenko, Putin’s unchecked military support of rebel aggression in Eastern Ukraine has brought sanctions upon many facets of Russian business (most recently, as the FT reported, the upcoming World Cup to be played in Russia may be withdrawn). These sanctions directly affect palladium supply, of which Russia has a considerable amount.

Want a 2014 Year-(So-Far)-In-Review of Precious Metals markets?

I See the Price of Palladium Risin’

As MetalMiner Assistant Editor Jeff Yoders noted last week, demand for palladium this year will exceed mine output by the most ever, according to London-based Johnson Matthey Plc, which makes a third of the world’s catalytic converters. To boot, a five-month labor strike crimped output in South Africa, the second-biggest source of the metal, helping boost prices 25 percent this year through Aug. 28.

“There is a lot of concern about palladium as imposition of more sanctions against Russia may affect supplies, which is already in a precarious state because of the strike,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, told Bloomberg Businessweek in a telephone interview last week. “Palladium will continue to remain supported.” MetalMiner’s lead forecasting analyst, Raul de Frutos, agrees with the latter sentiment.

Despite the price of US palladium bar hitting a 7-month uptrend for September’s MMI reading, sitting at $883 per ounce on the MetalMiner IndX, the monthly Global Precious Metals MMI® registered a value of 96 in September, a decrease of 2.0 percent from 98 in August. That was mainly due to a 5% drop in the US silver bar price, as well as platinum prices dropping off slightly in the US, China and Japan. Compare with last month’s trends – here’s our free August MMI® Report.

Gold Prices Tanking

Gold has been in the tank lately, this week almost hitting its lowest level in two-and-a-half months on “a stronger dollar and robust US economic data that curbed the metal’s safe-haven appeal,” according to Reuters. The USD is itself at nearly 14-month highs – which will affect industrial metals in its own way.

But to say nothing of the geopolitical risk factors, as central banks look to shore up their respective countries’ economies by keeping currencies low, that may be a good environment for monetary demand for gold and silver, according to ETF Securities’ recent research report.

However, look to make your industrial hedges within PGMs – and palladium in particular – as the latter looks to have more upside potential.

Gold, Silver, Platinum and Palladium Price Trends: Biggest Movers

Down:

Indian silver prices dropped by 5.2 percent this month to $708.36 per kilogram. After falling 5.0 percent, US silver finished the month at $19.36 per ounce. The price of US platinum bar fell 3.8 percent to $1,400 per ounce.

At $6.24 per 10 grams, Japanese silver was down 3.8 percent for the month. At $48.85 per gram, Chinese platinum bar was down 2.9 percent for the month. The value of Japanese platinum bar weakened by 2.2 percent this month, settling at $45.76 per gram. Chinese silver prices fell 2.0 percent to $686.28 per kilogram after rising the previous month. Chinese gold bullion fell a slight 0.5 percent over the past month to $41.34 per gram.

Up:

Japanese palladium bar rose 2.3 percent to $28.97 per gram. At $32.08, Chinese palladium bar finished the month up 2.1 percent per gram. US palladium bar prices inched up 1.5 percent to $883.00 per ounce. The price of Japanese gold bullion increased 0.8 percent to $41.26 per gram. Indian gold bullion gained 0.6 percent to finish the month at $464.07 per 10 grams.

US gold bullion held pat last month at $1,281 per ounce.

Don’t forget to read August 2014 MMI analysis before September’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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