There’s No Silver Lining to Precious Metals’ Slide

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On Wednesday we broke down commodities in different sectors and saw how precious is within the weak sectors, falling over 8% in a year.

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As commodities keep falling and the US Dollar keeps rising, the recent lack of investor appetite for precious metals doesn’t come as a surprise. Here is a quick visual breakdown of the significant weakness happening in the precious metals group, starting with the weakest of them: Silver.

Silver since 2012

Silver since 2012, chart courtesy of StockCharts.com.

Silver recently fell to its lowest level since 2010. The metal continues making new lows without showing any sign of strength. In October, the metal was trying to rally in low volume, which makes us wonder how long this rally will last (probably not too long). Silver is down 14% this year.

Platinum since 2012

Platinum since 2012, StockCharts.com.

Platinum is down 7% this year. The metal rose 15% in the first half, however, this rise wasn’t sustainable in the face of a rising dollar and a bearish commodities market. During the past 2 months, prices plummeted and they are now at their lowest levels since 2009. In the same manner, we are seeing a poor rally in October that most likely won’t last too long.

Gold since 2012

Gold since 2012, StockCharts.com.

Gold is pretty much flat this year. The metal is trying its best to hold above $1200 an ounce, however, it looks like it’s just a matter of time until gold falls to new lows as silver recently did. This would give us even further evidence to remain bearish.

Palladium since 2012

Palladium since 2012, StockCharts.com.

Palladium, is up 8% this year and it’s without a doubt the strongest of the precious metals. The metal fell with the rest of precious metals during the last 2 months, but still remains near its highest levels. As we stated earlier this year, palladium is the only precious metal worth buying. The trend is still up, although the potential of this metal seems limited while the rest of the precious metals perform badly.

What This Means For Metal Buyers

The only precious metal that our readers should be concerned of at this point is palladium. The rest of them, keep falling and the sentiment is bearish until things change. By using a trend-following strategy, it’s easy to identify which metals you should be buying down the market, and which ones not.

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