silver price

The Global Precious Monthly Metals Index (MMI) fell by 0.9% for this month’s index reading, largely due to falling silver prices.

Precious metals prices

Did you know that MetalMiner forecasts for several precious metals in the MetalMiner Insights platform?

Rising interest rates tend to dampen investor sentiment toward precious metals. Gold and silver typically act as a store of value, particularly during periods of high inflation. Therefore, the Fed’s half-point interest rate increase can largely be blamed for recent price weakness. In essence, the market has priced in the policies deployed by the Fed.

During times of uncertainty, gold and silver are considered safe-haven assets. In this case, the ongoing conflict in Ukraine, stubbornly high inflation, and the VIX (volatility index) are providing tailwinds for precious metals. Silver, on the other hand, has not seen the same highs. This is precisely why many experts are claiming that it’s time has come.

Silver prices

Source: MetalMiner Insights

However, from a technical analysis perspective, prices have begun to break down. Indeed, the macro trend has already turned to the downside, while price action shows signs of a market structure shifting downward on daily/weekly time frames. Moreover, support levels and price floors have yet to be established. As you can see, this has left silver to plummet through prior lows and take out any retail support.

Silver price chart

Gold Prices Look Similar to Silver

The precious metals MMI also shows that gold prices have continued their downward trend as well. This is mostly due to a recent shift in market structure beginning in late April. As prior lows continue to show weakness, price action suggests gold will look for stronger support levels. We suggest these will range between $1780-$1820/troy ounce, as indicated in the graph.

Gold Price Chart

Platinum Also Saw Price Declines

Platinum prices declined by over 5% percent month over month. Of course, platinum’s number one end-use application remains auto exhaust systems. And while global automakers show some month-over-month growth, production remains well below pre-pandemic production levels.

As always, buyers should familiarize themselves with the five best metal sourcing practices

In Other News: The Dollar Gains Strength

The US dollar continued its recent ascent, moving from 98.63 to over 103. Typically, a strong dollar equates to lower commodity prices. Interestingly enough, the CRB index appears to have held onto its gains while shifting into a short-term sideways pattern. Although April’s CPI finally dropped (to 8.3%), the decline was merely a result of drops in energy prices. The remaining core index has yet to find a floor. Still, according to the WSJ, the core price index increased by .6% after March’s .3% gain.

 Actual Metals Prices And Trends

  • The biggest movers included Japanese silver, which fell 9.8% to $7.26 per ten grams. Meanwhile, US silver fell 8.47% to $22.74/oz, and Japanese platinum fell by 8.35% to $29.17/gram.
  • The only upward movement came from US palladium bars which increased by 2.32% to $2254/ounce. However, it’s worth noting that those prices have since slipped.

 

The Global Precious Monthly Metals Index (MMI) fell by 1.4% for this month’s index reading, as gold prices retraced after peaking in early March.

The MetalMiner Insights platform features a full suite of precious metals prices. 

Gold, silver prices retrace

After peaking in early March, gold prices have retraced.

The U.S. gold bullion price jumped to nearly $2,040 per ounce March 8, nearly two weeks after Russia began its invasion of Ukraine.

As we noted last month, COMEX announced it would suspend six Russian gold and silver producers.

“Russia is a significant gold producer but still in single-digit percentages globally,” MetalMiner’s Stuart Burns explained last month. “Much more significant is palladium, where they produce 40% of global supply, and platinum, which is less but still very significant. The implications for the catalyst markets are real.”

Since the March peak, prices retraced down to around $1,920 per ounce early this week.

Meanwhile, silver prices peaked at $26.40 per ounce in March. Since then, they retraced down to $24.54 per ounce earlier this week.

Palladium prices also retrace

Elsewhere in the precious metals basket, palladium prices have also come back down after surging earlier in March.

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The Global Precious Monthly Metals Index (MMI) jumped by 7.1% for this month’s index reading, as the gold price gained while the US dollar retraced.

May 2021 Global Precious MMI chart

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Gold price up to three-month high

After stumbling to around $1,735 per ounce in late February, the gold price has gradually picked up steam.

The gold price closed April around $1,790 per ounce. However, gold really picked up last week, closing Friday at around $1,831 per ounce.

The price marked its highest since February.

Instructive for commodities in general, the US dollar has lost strength in recent weeks. In general, the US dollar and gold trade inversely.

The US dollar index closed March at 93.30 before steadily declining in April down to 90.60. Despite a slight recovery in early May, the dollar has continued to slide. The dollar index closed Friday at 90.23.

Meanwhile, in other economic indicators, the 30-year Treasury yield fell to 2.28% last week. Generally, the gold price correlates inversely with bond yields.

The 30-year yield reached a 2021 high of 2.45% in March.

The 10-year yield closed last week at 1.60% after hitting a 2021 high of 1.74% in March.

Furthermore, the US added 266,000 jobs in April, well below expectations. The underwhelming jobs report follows the addition of 916,000 jobs in March. Unemployment ticked up slightly to 6.1% from 6.0% in March.

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silver price

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The green agenda has lifted prices across the metals sector.

To what extent it has driven physical demand rather than sentiment-driven investor activity — in the form of exchange-traded fund (ETF) buying, stockpiling or exchange position building — is debatable. It’s more of the latter than the former, we would suggest, as the main physical driver for metals remains electrification in transport. As a percentage of the whole, that remains relatively small.

But one important metal in the sector that has yet to see the same support this year is silver.

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Silver price trends

After hitting a low of $24/oz back in early April, the silver price has seen a steady appreciation to just under $27.50/oz today.

However, it has still not hit the artificial eight-year high seen in January, when it reached nearly $30/oz on the back of frenzied retail investors’ demand.

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The Global Precious Monthly Metals Index (MMI) rose by 3.7%, as the gold price trended sideways in March.

April 2021 Global Precious MMI chart

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Gold flat in March, picks up in April

gold price

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Late last year, MetalMiner’s Stuart Burns touched on the gold price’s prospects in 2021.

Gold surged above $2,030 per ounce last August amid ongoing economic uncertainty and well before the rollout of COVID-19 vaccines.

Since then, however, the gold price has cooled significantly. From the aforementioned peak, gold has dipped approximately 15%.

The gold price trended sideways throughout March, settling in around $1,730 per ounce. Despite a dip in treasury yields — which gold typically moves inversely to — the price largely held in place, as the US dollar strengthened.

The US dollar index rose to 93.30 in late March before retreating in the first week of April (coinciding with a modest bounceback for gold and silver).

So far this month, however, gold has shown some upward momentum. The gold price picked up Thursday, approaching the $1,760 per ounce mark.

Like gold price, silver price bounces back in April

Meanwhile, the silver price narrative followed a similar theme to that of the gold price.

After reaching $28.10 per ounce in February, the silver spot price fell to just below $25.00 per ounce to start April. Over the last week, silver has clawed back some gains, reaching around $25.50 per ounce Thursday.

While silver is often most thought of for its use in jewelry and kitchen utensils, the precious metal does have high-tech industrial applications.

As MetalMiner’s Stuart Burns noted earlier this week, nations around the world will need to secure their supply chains for the next industrial revolution, whether it’s the broader push toward renewable energy or the automotive sector’s transition toward electrification.

Among other uses, silver is used in semiconductors. As we’ve discussed at great length in recent months, the semiconductor shortage continues to weigh on automotive manufacturers.

30-year treasury yield declines

Meanwhile, the 30-year treasury yield has slipped over the last few weeks. Generally, higher yields serve as an indicator of economic confidence (as opposed to the gold price).

The 30-year yield reached a high of 2.45% on March 19.

This week, the yield fell to 2.32% on Thursday, down from 2.35% the previous day.

The 10-year yield fell to 2.22% on Thursday, down from a March peak of 2.36%.

The minutes of the Federal Open Market Committee’s meeting in March make reference to the March rise in yields.

“In the United States, the trend toward higher longer-term yields observed in recent months accelerated over the intermeeting period, and far-forward real rates based on Treasury Inflation-Protected Securities (TIPS) rose considerably,” the minutes indicated. “Market participants highlighted an improving economic outlook, bolstered by passage of the American Rescue Plan (ARP) and progress on vaccinations, as underlying the increase in yields.”

Sibanye-Stillwater announces strategic partnership with Johnson Matthey

Sibanye-Stillwater recently announced a strategic partnership with British sustainable technology company Johnson Matthey.

Through the partnership, the South African mining giant said it aims to “develop solutions to drive decarbonization.”

Furthermore, the parties will explore more efficient use of PGMs and other metals in battery technology.

“Johnson Matthey and Sibanye-Stillwater will collaborate on the sourcing and application of PGMs and metals used in battery technology to enable the development and commercialisation of low carbon technologies, with a focus on circularity and sustainability,” Sibanye-Stillwater said in its release. “In addition, the companies will examine potential opportunities to apply their collective experience to support the development of more sustainable supply chains for battery materials.”

Actual metals prices and trends

The US silver price dipped by 8.6% month over month to $24.41 per ounce as of April 1.

The US platinum bars price held flat, closing the month at $1,180 per ounce. Meanwhile, US palladium bars rose by 14.0% to $2,540 per ounce.

The Chinese gold price fell by 1.8% to $55.41 per gram. The US gold price fell by 1.6% to $1,709 per ounce.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

gold bars

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The Global Precious Monthly Metals Index (MMI) fell 2.2% for this month’s index reading, even as the gold price surged in late October.

November 2020 Global Precious MMI chart

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

Gold price surges before significant drop

After hovering around $2,000 per ounce in August, the gold price took a step back over the ensuing months.

In late October as Election Day approached in the U.S., gold fell to $1,878 per ounce to close the month. The price rose as high as $1,960 per ounce by Nov. 9.

However, the gold price lost a good deal of shine that day, plummeting back down to $1,860 per ton. The single-day decline marked gold’s largest drop in seven years, according to MarketWatch.

News of a potential Pfizer and BioNTech COVID-19 vaccine sent the dollar upward. The dollar index closed last Friday at 92.23 before closing Monday, Nov. 9, at 92.72.

Gold in Scotland?

Late last month, MetalMiner’s Stuart Burns delved into Scotgold’s efforts to develop gold reserves in Scotland’s Trossachs National Park.

“So, it has taken a strong gold price and political blessing for Scotland’s only domestic gold miner, the aptly named Scotgold, to gain permission to develop gold reserves in the Trossachs National Park,” Burns wrote. “The park is in an area of outstanding natural beauty and is home to some of the best-preserved oak woodlands in Scotland.

“Gold mining and Scotland are not activities and locations that one immediately makes an association between. In fact, more Scots rushed to California’s gold rush than ever mined at home.  However, gold prospectors have looked for gold in Scotland’s rivers for centuries.

“The country is in the broad gold belt that stretches from Scandinavia across Greenland to Canada with, in places, similar topography and geology.”

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silver price

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Silver’s rise has been meteoric since its low in mid-March.

The precious metal’s surge has been particularly notable over the last month.

Both gold and silver have benefited from cheap money, a weak dollar and stronger oil prices. The yield on the benchmark 10-year U.S. Treasury note is presently around 0.57%, while the oil price is holding around $42 per barrel.

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Dollar’s slide drives commodities up

Driving all commodities higher, the U.S. dollar index has slipped nearly 7% in the last three-month period. Measured against six major currencies, the dollar is down nearly 9% from its March highs and is on track for its worst month since 2011, according to a Yahoo Finance report.

Other investment products, like Bitcoin, are also up sharply.

However, gold and silver have been stealing the headlines.

Investors are betting on gold going through $2,100/ounce shortly and silver to top $30/ounce.

Silver lining

Unlike gold, though, the fundamentals for silver have some decent legs.

The LME has operated the LMEprecious suite of exchange-traded contracts since 2017. In a recent update note, the LME reported industrial demand for silver last year topped 16,200 tons. Furthermore, demand is forecasted to increase thanks to its role as a component in antennae for the new 5G mobile network infrastructures being rolled out around the world.

Like gold, silver benefits from the jewelry market, which is expected to pick up as economies gradually recover from lockdowns. In addition, silver has a wide range of industrial applications, which are coming back fast — first in Asia, but now in Europe and the U.S.

Looking ahead at the silver price

Two weeks ago, analysts at Goldman Sachs lifted their 12-month forecast for silver to $30 per ounce by year’s end.

However, that prediction became within reach after just a fortnight.

The bank’s prediction was based largely on the back of an expected continuing weakness in the greenback. The analysts argued a further 5% decline is probable before the year’s end. On top of that, no end is in sight for rock-bottom interest rates.

Silver’s rise has been so dramatic over the last 30 days; a pullback is to be expected.

In fact, silver bulls are said to be looking for short corrections to create more value to add to positions.

Both gold and silver retrenched yesterday. Gold fell below $2,000/ounce, while silver dropped toward $27/ounce.

But whether that will be enough to dampen spirits for a push higher in coming weeks will depend on the course of the dollar, indications on post-pandemic recovery and further action by the Fed regarding longer for lower interest rates.

You’d be brave to bet against it.

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