Silver prices in Japan, India and the US all rose over the past month, as did gold prices in the same regions. Silver and gold prices in China, however, fell ever so slightly. These inputs, as well as platinum and palladium prices showing mixed movement, resulted in MetalMiner’s monthly Global Precious Metals MMI® registering a value of 84 in June, holding steady at May’s level.
The real stories that concern us, however, may reside in the PGM markets.
2015 GFMS Platinum & Palladium Survey SAYS:
Thomson Reuters recently released its GFMS Platinum & Palladium Survey 2015, and in it, noted that the platinum market to be in a deep deficit last year “(prior to inventory movements) of 1.02 million ounces, singularly owing to major strike-related production stoppages in South Africa.” The 2014 deficit comes on the heels of surplus in 7 of the last 8 years; the deficit is expected to continue.
Meanwhile, palladium has been a market in deficit since 2007. The GFMS team estimates “the palladium market deficit last year at 1.58 million ounces, representing the most severe market imbalance for more than a decade.”
GFMS Platinum, Palladium Price Forecast
According to the survey, the average platinum price is forecast to fall by 16% year-on-year, averaging $1,170/oz, about 5% higher than May’s closing price on the MetalMiner IndX. Analysts indicate that this suggests a closing of platinum’s discount to gold. The average palladium price forecast is broadly flat year-on-year at $800/oz, not too much higher than current prices.
William Tankard, research director of mining at Thomson Reuters, is quoted as saying, “It appears to us that forward buying programs by the automotive sector are developing increasing levels of flexibility for these consumers to purchase metal when they want to, rather than need to; the sector is becoming increasingly price-sensitive. Without enduring production cuts to be achieved, by permanently closing high-cost mines, the platinum market is expected to return to surplus next year. Of course, it’s a huge challenge as a producer to make that call, incur restructuring costs and permanently close capacity, if you believe the price will recover in the short- to medium-term.”
How Does That Compare to MetalMiner’s Outlook?
It roughly matches what our lead forecasting analyst, Raul de Frutos, has written recently; in short: “Recent weakness in the dollar is giving a boost to precious metals. However, these price movements have been quite shy so far. It still makes sense to be long-term bullish on the dollar and bearish on precious metals.”
Exact Precious Metal Price Movements
Japanese silver reached $5.33 per 10 grams after a 6.8% increase for the month. It was a strong month for US silver as well. The metal posted a 5.9% increase, finishing at $17.05 per ounce. Following a 5.4% change in price, Indian silver closed the month at $619.15 per kilogram. Japanese gold bullion finished the month at $38.23 per gram after gaining 4.5%. The price of Japanese palladium bar increased 2.6% to $24.79 per gram. At $1,200, US gold bullion finished the month up 1.4% per ounce. Japanese platinum bar prices increased from JPY ($35.43) to $35.79 per gram last month. Indian gold bullion prices inched up 0.8% to $427.67 per 10 grams.
Chinese platinum bar prices dropped by 3.6% this month to $38.43 per gram. The value of US platinum bar weakened by 2.3% this month, settling at $1,116 per ounce. Chinese gold bullion prices fell 1.1% to $38.22 per gram after rising the previous month. After rising the previous month, Chinese palladium bar prices dropped 0.6% to $27.81 per gram. Chinese silver prices fell 0.1% to $573.98 per kilogram after rising the previous month.
Hovering around $776.00 per ounce for the month, US palladium bar remained unchanged.
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.