After hitting an all-time low in December 2015 — dipping down into the 60s — the Global Precious Metals MMI rebounded a bit and is now hovering at 70 for the second consecutive month.
Of the three heaviest-weighted metal price points within this precious sub-index, gold bullion in both the U.S. in China, and silver ingot/bars in the U.S. all increased over the the last month, the primary drivers buoying the February MMI reading.
Gold Price Outlook
The longer-term outlook, though, may not be all that rosy for gold prices. “Despite talks of China and Russia buying gold, I still see main factors such as a strong [U.S.] dollar and a bear commodity market keeping a lid on gold prices,” Raul de Frutos, metals procurement specialist for MetalMiner, told me. “The price rally seen in January is way too small to consider that something is changing in the long-term picture.”
“I still have a neutral/bearish view on gold,” he concluded.
The Bigger Price Story: Palladium Downtrend
However, in a more interesting trend on the industrial metals side of the precious sector, two of the PGM price points we track on the MetalMiner IndX – for U.S. platinum and palladium bars – dropped 1.7% and 8.1% (!), respectively.
The U.S. palladium price has ticked up for a few days in a row since we took our MMI reading on Feb. 1, but it’s lost a whopping 26.3% in value since the beginning of November 2015.
So what’s going on in the palladium market?
The recent stock market selloff in China, which caused global tumult, is the real culprit hurting both palladium and platinum. A strong dollar is not helping matters, either.
Strong car sales globally – in Europe, China and the U.S., with the latter two hitting all-time highs – did not correspond with stronger performances for platinum and palladium prices.
Despite analysts calling again for deficits in palladium and platinum markets this year, Raul has written that “it’s hard to imagine these two metals rising while China keeps driving everything down.”
Exact Precious Prices, Trends
The U.S. palladium bar price dropped 8.1% to $497/oz, from $541/oz in January. U.S. platinum bars also dropped, by 1.8%, down to $864/oz. China gold bullion rose slightly more than a dollar per gram, ending up at $35.98/gram.