silver price

We warned last month that the mostly small losses the prices our MetalMiner IndX experienced were caused by investors taking profits.

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Our suspicions were confirmed when almost all of our sub-indexes had big price rebounds this month. The Automotive MMI jumped 12.2% Raw Steels 8% and Aluminum 6%. Even our Stainless Steel MMI only dropped 1.7% and has taken off since February 1 as nickel supply is even more in question now with both the Philippines and Indonesia’s raw ore exports in question.

The bull market is on for the entire industrial metals complex. Last month’s pause was necessary for markets to digest gains but the strong positive sentiment for both manufacturing and construction shows no signs of ebbing in the U.S. and Chinese markets.

Our Global Precious Metals MMI took a slight step backward this September, coming in at a value of 85 — a 4.5% drop from the previous month’s 89.

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However, the latter half of the summer has been kind to the gold, silver, platinum and palladium prices we track, with the past three months representing the highest MMI values of the entire calendar year.

Global-Precious-Metals_Chart_September-2016_FNL

All four precious categories tracked by the MetalMiner IndX softened over the month of August for our September 1 reading, contributing to the overall 4-point decline.

Main Index Drivers: Platinum and Palladium Prices

In a forthcoming MetalMiner analysis, my colleague Stuart Burns will share his findings from interviewing Trevor Raymond, director of research at the World Platinum Investment Council. The main takeaway? That the platinum market is like a “ticking time bomb.”

Two-Month Trial: Metal Buying Outlook

Essentially, the global platinum market has been in deficit for five years running, with mine strikes and shortfalls leading the way into a supply-side headache for the industry. Demand, meanwhile, appears robust, according to WPIC’s data and quarterly reports, led by developments on the heels of Volkswagen‘s diesel scandal, China and India’s jewelry desires, and a potentially interesting knock-on effect from rising oil prices. Read more

After hitting a new all-time low last month, the monthly Global Precious Metals MMI® bounced back up a bit to catch its breath, and registered a value of 76 in September, an increase of 2.7% from 74 in August.

So What’s At Play? Gold Prices and Fed Hikes?

Yesterday, Reuters reported that spot gold prices lost more ground, after drifting downward the past several days.

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The precious metal was “hurt by a stronger dollar and as investors awaited a key US jobs report to gauge the timing of a Federal Reserve rate hike” – however, the global stock market [expletive]-show that has been rocking investor confidence lately may just be the only thing the Fed needs to go through with the hike.Global-Precious-Metals_Chart_September-2015_FNL

(Besides, ADP‘s private-sector jobs report, released this past Wednesday, betrays severe underperformance – fewer than 200,000 jobs have been added in 6 of the last 8 months, as mentioned here.) Read more

As the base metal and ferrous metal complexes we cover continue to take a bruising, the peripheral hits have struck our precious metals price index as well, with PGMs platinum and palladium leading the charge downward.

Free Sample Report: Our New Monthly Metal Price Outlook

In fact, the monthly Global Precious Metals MMI® registered a value of 74 in August, a decrease of 7.5% from 80 in July – thereby hitting a new all-time low. Every single metal price point for gold, silver, platinum and palladium dropped across all geographies we track, including the US, China, India and Japan.

precious metals price chart august 2015

This index has never seen the 70s before, and it’s not having a really nice day as they used to say in the ’70s (at least not for investors).

RELATED: 3 Best Practices for Buying Commodities

Precious Metal in Focus: Palladium

According to my colleague Raul de Frutos, writing at the end of July, palladium prices fell as much as 14% during that month:

Palladium price since 2013

Palladium price since 2013. Graph: MetalMiner.

Ironically, palladium was the best performer among precious metals until just about a year ago when it started to fall, Raul wrote. So far, year-to-date, palladium has tanked 32% with the most precipitous drop showing over the past two months. So what’s been driving the price meltdown?

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Due to its role in gas-powered car engines, palladium is more exposed to the Chinese and US automotive markets than to European markets. The slowdown of the Chinese automotive market over the past few months may be Public Enemy No. 1 as far as a driver of palladium’s price decline.

Free Download: Compare With the July MMI Report

Just a couple days ago, BMW and Toyota Motor Corp. publicly voiced their concerns over China’s car market, saying that the days of double-digit growth are likely over, as reported by Bloomberg. Both companies are concerned about their profits getting dinged, and are therefore cutting back production based on low demand numbers – BMW, for example, said earlier this week that it had cut production in China by 16,000 cars so far this year.

And Platinum?

South African mines, producers of 70% of the world’s supply, have been reporting production levels for platinum above those during the 5-month strike in 2014, as Raul has pointed out in his previous coverage. Combined with the lollygagging of the Chinese auto sector, looks as though platinum prices may not see a huge rebound for some time as well.

Wild Card

Remember, the strength of the US dollar plays a big role in the movement of this index. The dollar-to-euro exchange rate has been listed as the No. 1 driver of all the base metals in our latest, newly revamped monthly buying outlook, and it’s safe to say that’s no exception for gold and silver movement – when the dollar is strong, investors tend to leave gold behind as a safe haven a little more often.

Exact Precious Metals Prices and Trends

The price of US palladium bar fell 9.5% to $609.00 per ounce. At $34.26 per gram, Chinese platinum bar was down 9.0% for the month. The price of US platinum bar closed the month at $982.00 per ounce after dropping 8.8%.

* Get the complete prices every day on the MetalMiner IndX℠

Indian silver prices fell 8.4% to $541.82 per kilogram. Japanese platinum bar prices dropped by 8.1% this month to $31.59 per gram. A 7.1% decline for Japanese palladium bar left the price at JPY 2,470 ($19.91) per gram.

A 6.6% drop over the past month left US gold bullion at $1,095 per ounce. After falling 6.4%, Chinese gold bullion finished the month at $35.31 per gram. Following a 6.0% decline in price, Chinese palladium bar finished the month at $22.84 per gram.

Chinese silver prices dropped by 5.9% this month to $515.48 per kilogram. After falling 5.9%, Indian gold bullion finished the month at $393.44 per 10 grams. A 5.7% decline for Japanese gold bullion left the price at JPY 4,365 ($35.19) per gram. At $14.79 per ounce, US silver was down 5.6% for the month.

Following a 3.9% decline in price, Japanese silver finished the month at $4.76 per 10 grams.

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.

It’s safe to say that the Greece and China crises that have hit the global economy are going to be the biggest issues to watch as far as the precious metals markets – and prices – are concerned.

Over the past month, the monthly Global Precious Metals MMI® fell 4.8% from 84 in June, and it may have further to fall before July is out.

Global-Precious-Metals_Chart_July-2015_FNL

* Read what we said in last month’s analysis.

China’s Star is Falling

One may think that the Chinese equity market crash may help investors flock to gold as a safe haven – but not so fast.

A leading precious metals consultancy called Metals Focus, which interestingly, according to this article, has booted GFMS as the primary supplier of statistical data to the World Gold Council, points out that due to China being a gambling culture, “reckons there is more the likelihood that weak equity prices may end up adversely affecting physical gold demand. Losses generated by the impact of the stock market crash may well hit jewellery and gold artefact purchases, while the scale of the fall is such that potential investors nursing big losses may well not have the liquidity to move back into gold.”

Which would likely mean that gold prices won’t see a whole lot of support. As my colleague Raul de Frutos has noted around the office water-cooler recently, “gold’s safe haven thesis” is not really playing out, probably because of a strong dollar.

Saturday Night at the Palladium: Also Down

The palladium prices from all three global markets we track on our IndX (the US, China and Japan) fell by double digits over the past month. Platinum prices also haven’t looked so hot, looking at 6-year lows, mainly driven by weakness across other commodities and industrial metals.

Palladium spot price since 2012

Palladium spot price since 2012. Source: MetalMiner.

So what to watch in palladium and PGM markets in general?

  • Keep an eye on that US dollar – a strong dollar means a weak South African rand, and that means good news for SA producers to boost supply
  • Investment activity – ETF and other inflow/outflows
  • Next China PMI -> What that means for China automotive demand -> What that means for China auto production

Actual Gold, Silver, Platinum, Palladium Prices

After rising the previous month, Japanese palladium bar prices dropped 13.6% to $21.73 per gram. The price of US palladium bar fell 12.8% to $673.00 per ounce. At $24.32 per gram, Chinese palladium bar was down 12.2% for the month.

Japanese silver prices fell 7.3% to $5.02 per 10 grams after rising the previous month. After rising the previous month, US silver prices dropped 6.2% to $15.66 per ounce. After falling 4.8%, Chinese silver finished the month at $548.32 per kilogram.

Japanese platinum bar prices fell 4.0% to $34.85 per gram after rising the previous month. After rising the previous month, Indian silver prices dropped 2.5% to $594.89 per kilogram. Japanese gold bullion prices fell 2.5% to $37.83 per gram after rising the previous month. At $1,077 per ounce, US platinum bar was down 2.2% for the month.

After rising the previous month, Indian gold bullion prices dropped 1.8% to $420.36 per 10 grams. Last month, Chinese platinum bar prices dropped by 1.7% to $37.68 per gram. The value of US gold bullion weakened by 1.4% this month, settling at $1,173 per ounce. The price of Chinese gold bullion drifted 1.0% lower to $37.78 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.

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.

precious metal price index chart

Compare with last month’s report: download it free here.

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.” Read more

Bolstered by a weaker dollar, global precious metals rose last month as industrial demand for palladium was finally joined by higher gold bullion and platinum prices.

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The number of Americans applying for first-time unemployment benefits inched up by 3,000 to a seasonally adjusted 265,000 in the week ended May 2, the Labor Department said recently. This was less than the 275,000 economists predicted and within reach of the unrevised 262,000 level for the prior week—the lowest since 2000.

Global-Precious-Metals_Chart_May-2015_FNLThis is the latest sign that an interest rate hike may come from the Federal Reserve as continued improvement in the US labor market might clear the path for rate hikes. Read more

Without major central bank actions, precious metals will continue to fall in Q2 and possibly longer.

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The decline that began in February has taken hold for metals such as palladium, gold and platinum and it looks to be a long-term trend that won’t end, based on market forces alone, for some time.

Global-Precious-Metals_Chart_April-2015_FNL

Palladium price weakness pushed the monthly Global Precious Metals MMI® to a value of 83 in April, a decrease of 3.5% from 86 in March. Read more

The gold price fell to a two-month low on Friday, after data showed the US economy created more jobs than expected last month, bolstering the case for the Federal Reserve to raise interest rates around the middle of this year.

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Gold for April delivery, the most actively traded contract, was recently down 0.9% at $1,185.70 an ounce on the Comex division of the New York Mercantile Exchange. That is the lowest intraday level for the most active gold contract since Jan. 5.

US employers added 295,000 jobs to payrolls in February and the unemployment rate fell to 5.5%, the Labor Department said Friday. Economists surveyed by The Wall Street Journal had expected payrolls to increase by 240,000.

Japanese silver saw a 1.4% drop on Thursday, March 5, landing at JPY 634.00 ($5.30) per 10 grams and making it the biggest mover of the day. The price of Indian silver rose 0.5% to INR 37,302 ($598.65) per kilogram after a two-day drop. The price of Chinese silver fell 0.4% to CNY 3,510 ($559.52) per kilogram. The price of US silver flattened at $16.21 following two-days of declines.

* Get the complete prices every day on the MetalMiner IndX℠

The price of Indian gold bullion is back up, rising by 0.5% yesterday to close at INR 26,747 ($429.25) per 10 grams. Chinese gold bullion closed 0.3% lower at CNY 243.64 ($38.84) per gram. At $1,200 per ounce, US gold bullion fell 0.3% yesterday. The price of Japanese gold bullion declined 0.2% to JPY 4,641 ($38.79) per gram.

US platinum bar finished the day down 0.2% to $1,180 per ounce. After a 0.2% increase, Japanese platinum bar finished the day at JPY 4,574 ($38.23) per gram. At CNY 257.00 ($40.97) per gram, the price of Chinese platinum bar was essentially unchanged.

US palladium bar ended the day at $824.00 per ounce, after the 0.2% drop yesterday. The price of Japanese palladium bar steadied at JPY 3,202 ($26.76) per gram following two-days of increases. The price of Chinese palladium bar flattened at CNY 186.00 ($29.65) after two days of improvement.

The Global Precious Metals MMI® fell to a value of 86 in March, succumbing to the across-the-board decline that has affected commodities this year. It was a decrease of 4.4% from 90 in February, a month in which gold and silver saw a sharp spike as a hedge against weaker currencies.

Global-Precious-Metals_Chart_March-2015_FNL

In February, gold and silver came back down to Earth and the precious metals status quo was maintained.

Fed Inaction Means No Action for Prices

The strong dollar and the resolution of Greece’s latest bailout talks have not helped the investment metals and gold, particularly, lost some of its value as a result this month. Palladium is still in high demand for industrial and automotive uses but, unlike last month, it could not overcome the losses felt by its fellow PGMs.

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The Federal Reserve is widely expected to raise interest rates in the second half of the year, but recent comments by Fed Chairwoman Janet Yellen seem to have soothed the fears of investors who believed such a move could come as early as June. Yellen said the Fed would proceed cautiously during minutes recently released from its 2009 open committee meetings.

Read more

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