Global Precious MMI: Gold price bounces back in May as dollar moves sideways

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The Global Precious Monthly Metals Index (MMI) rose by 1.3% for this month’s reading, as the gold price rose to around $1,900 per ounce.

June 2021 Global Precious MMI

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Gold price picks up to close May

gold price

Olivier Le Moal/Adobe Stock

The gold price made steady gains in May, rising to around $1,900 per ounce to close the month.

Since then, however, the price dropped to around $1,860 per ounce to start June. The gold price then bounced back to around $1,890 per ounce Wednesday afternoon.

Meanwhile, the U.S. dollar index, which generally moves inversely to the gold price, dropped in early May. After that, the dollar trended sideways, closing Tuesday at 90.08.

In other economic indicators, the U.S. 30-year treasury yield, which also generally moves inversely to the gold price, fell to 2.21% on Tuesday. The yield curve rate marked its lowest level since March 2.

The 10-year yield fell to 1.53%, its lowest since March 10.

Nornickel resumes mining at Taimyrsky

Russia’s Norilsk Nickel, the world’s top producer of palladium, announced it had resumed operations at its Taimyrsky underground mine.

“Currently, the mine has reached a daily mined volume of 5 kt, which is about 40% of the design capacity,” Norilsk said June 4.

Meanwhile, on May 13, Norilsk said it had resumed full mining operations at its Oktyabrsky mine. The mine has full capacity of 14.1 kt.

“Water pumping from the horizons of the Oktyabrsky mine has been completed,” said Nikolay Utkin, senior vice president and head of the Norilsk Division. “Ore extraction and operation of its two shafts has been restored and the mine is now operating at its design capacity.”

Norilsk optimistic about PGM market

Norilsk noted PGMs did experience significant setbacks during the COVID-19 pandemic. However, the miner is optimistic about the future of PGM consumption.

“Thanks to the massive support from the governments and central banks, the experts see a continued recovery of the PGMs market in 2021,” the company said. “The COVID-19 influence is not over yet and markets still experience aftershocks — e.g. the shortage of semiconductors reducing the automotive production by 2-3 million vehicles this year and with the impact expected in 2022 as well. However, the analysts expect that the automotive market and PGM consumption will recover to the pre-COVID levels.”

With respect to palladium, Norilsk said recovering demand paired with some supply disruptions will lead to a deficit as compared to previous estimates of a balanced market.

“This recovering demand will be met by the rebounding supply from South Africa and other regions as well as recycling,” Norilsk said. “However, the suspension of Nornickel’s concentrator and Oktyabrsky and Taimyrsky mines have widened the expected deficit of current supply vs demand to 0.9Moz in 2021 vs the previous estimate of a balanced market.”

Actual gold price, silver price and other trends

The U.S. silver price rose by 7.0% month over month to $27.94 per ounce as of June 1. The U.S. gold price jumped by 7.4% to $1,904 per metric ton.

Meanwhile, the U.S. platinum bar price fell by 1.4% to $1,177 per ounce. The U.S. palladium bar price dropped by 4.7% to $2,728 per ounce.

Chinese gold price gained by 8.2% to $61.69 per gram.

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