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Consolidation of Gold price

US economy could put Gold under pressure

The price of Gold continues its consolidation and fell last Thursday - in a generally rather quiet market environment - to as low as 1,310.50 $/oz. The metal closed the week at 1,323 $/oz and thus for a second consecutive week with a loss. The ECB rate decision had only limited impact for the metal: The European Central Bank left - as before the Bank of England - the interest rate unchanged. The lower price resulted in a slight decrease of scrap sales - both in Asia and in Europe. In the next days the Gold price should see technical support around 1,310 $/oz, while a first resistance is expected at 1,335 $/oz. The uptrend, which started in June, is still intact despite the recent correction. Under these circumstances we do not rule out a recovery in the medium term. This week market impulses will come from the central banks in the US and Japan. While we do not expect any rate hikes from these meetings, comments on the positive economic development in the US could put pressure on the Gold price.

Silver with slight price consolidation

Federal Reserve’s outlook takes center stage this week

Silver prices consolidated last week again significantly below 20 $/oz which translates into a decrease of around 3%. Price pressure came from improving interest rate expectations due to surprisingly good economic and inflationary developments in the USA. News out of China were more positive for the metal: The Silver imports in the first half of the year have increased by 6% (yoy) and economic reports were unexpectedly positive. The ETF holdings remain at all-time highs. From a technical point of view support lies at 19.20 $/oz and resistance at 19.86 $/oz. After the substantial gains made within a very short period, there is now a risk of further short-term consolidation.

No clear direction due to lacking price drivers

Platinum appreciates by 25% in 2016

In the course of last week Platinum briefly lost in value, but could establish itself again at 1,100 $/oz by the end of it. The next target could be the 200-day moving average at 1,127 $/oz, but it’s likely to remain a testing of this level without overcoming it. Unfortunately other impulses that could result in a change of the direction are missing. The net long Nymex positions rose to 2.36 Moz - the highest level since August 2014. Platinum sponge trades at the same premium as last week. Overall industrial demand continues to be weak - with the exception of the automotive sector.

Despite rising primary supply, Platinum has seen an increase of approximately 25% so far this year. Anglo American Platinum (Amplats) reports nearly twofold sales in Q2 compared to Q1 (413,000 ozs  808,000 ozs). Comparing the 2nd quarter to the same period last year, this is an increase of 27%. The wage negotiations in South Africa have in the meantime started, but do not show any trends yet. It is expected that the talks will continue to take place peacefully, even though the ideas of the Association of Mineworkers and Construction Union (AMCU) appear very ambitious.

Palladium on the rise

Prices above 680 $/oz last recorded in October 2015

Palladium has continued its upward trend and climbed continuously from 630 $/oz at the beginning of the week to a level around 685 $/oz. The metal left the resistance at 665 $/oz rather effortlessly behind and thus closed the week with a profit of around 50 $/oz. Prices above 680 $/oz were last seen in late October 2015. Main driver for Palladium are the currently strong car sales in China, which we mentioned already last week. Palladium sponge trades at the same premium as last week.

Rhodium / Ruthenium / Iridium

Rhodium without new impulses; Ruthenium unchanged and Iridium “on the move”

For Rhodium, it was a relatively unspectacular week without any significant changes in price and unfortunately, without clues for its future direction. The sideways movement continues, as the higher price levels of Platinum and Palladium could not pull Rhodium along – despite generally good turnover. Ruthenium trades unchanged without significant tendency for either direction. The price appears to be set in stone at the moment. Iridium is moving again. Demand continues to be very strong which helped the price to increase further. Sellers are still holding back larger amounts, hoping for even higher prices. Despite the holiday season the prospects are indeed very good and based on continuous demand, we see further potential.

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  • Rhodium
  • Gold
  • Silver
  • Iridium
  • Palladium
  • Platinum
  • Ruthenium
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