The monthly Global Precious Metals MMI® registered a value of 88 in January, a decrease of 2.2 percent from 90 in December, matching the index’s lowest reading of all time (first reached in July 2013).
Plummeting gold bullion prices in the US and China, along with a dip in the US silver price, nearly single-handedly drove the monthly index down. However, palladium prices in the US and Japan dropped as well – a two-month trend.
Although US and Japan prices on the MetalMiner IndX℠ have fallen the past two months, most analysts and market commentators agree that palladium is looking likely for a price rise in 2014. Much of this is due to supply-side concerns in South Africa and, especially, Russia.
Russia’s famed palladium stockpile looks to finally be dwindling. According to Johnson Matthey, Russia’s 2012 stockpile sales came in at just 250,000 ounces, down from 775,000 in 2011. This year, the firm believes it could be just 95,000 ounces.
For now, steady industrial demand (driven by catalytic converters in gas-powered cars) and the threat of supply disruption continue to have the upper hand and suggest there is more potential on the upside than the down.
A Tough Year for Gold
Obviously the gold story this year was a sad one, prompting certain folks to posit whether bitcoin will overtake the yellow metal as a store of value. Indeed, according to a recent note from ETF Securities, gold ETP assets under management dropped to $76 billion from $147 billion at the start of the year.
However, gold ETP outflows peaked in 2Q 2013, and if gold’s activity at the close of 2013 is any indication, is the market looking up? Prices hit a two-week high today and are headed for the best weekly performance since October – but according to Chen Min, an analyst at Jinrui Futures in Shenzhen quoted by Reuters, “it won’t continue for the remainder of the year as the (Fed) tapering is set to begin and the global economy is improving.”
Key Drivers of the Precious Metals Index
The price of Indian gold bullion fell 8.5 percent to $446.27 per 10 grams. US gold bullion prices dropped by 3.3 percent this month to $1,197 per ounce. Chinese gold bullion prices decreased by 2.1 percent this month, ending at $39.73 per gram. Japanese palladium bar fell 1.5 percent to $22.23 per gram. At $706.00 per ounce, US palladium bar was down 1.4 percent for the month. Last month, Chinese silver prices dropped by 1.0 percent to $672.69 per kilogram. The value of Chinese palladium bar weakened by 0.6 percent this month, settling at $26.11 per gram. US silver closed the month at $19.57 per ounce after dropping 0.5 percent.
The price of Japanese silver jumped 3.2 percent last month to $6.34 per 10 grams. Japanese platinum bar prices inched up 1.8 percent to $43.61 per gram. After a 0.4 percent increase, US platinum bar finished the month at $1,357 per ounce. Finishing the month at $756.43 per kilogram, Indian silver recorded a 0.4 percent increase. Japanese gold bullion rose 0.2 percent to $38.88 per gram.
Chinese platinum bar held pat last month at $47.60 per gram.
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.