NEWS

Mon 11 Oct 2021

IMPORTANT DISCLAIMER: any and all views expressed here are simply good faith views and should not be taken as recommendations or inducements to buy or to sell or to othwise trade in any way whatsoever. 

GOLD:  fears concerning Chinese military incursions into Taiwanese airspace are again lending price support to gold. The plethora of monthly annoucements from US entities ( Federal Reserve, Non-farm payrolls report, Unemployment claims report, Domestic mortgage applications report, etc, etc) continue to cause price volatility via the massive US paper/electronic ( ie. futures, options, derivatives) trade. This market dwarfs London's physical trade and is such a huge market factor it might be supposed to be able to serve political & national economic aims apart from commercial interests. 

Simple supply of and demand for physical gold is often of less importance to its price than market sentiment creating something of a chicken and egg situation as sentmients manifest through derivative trading.

 

PALLADIUM: reports of widespread reduction of vehce production due we are told to a shortage of microchips and increasing media comment of platinum possibly being used as a Pd substitute in auto catalysts caused price to fall and is currently volatile . 

UPSIDE PRICE PRESSURES - the major Russian producer Norilsk announced in 2019 that they had received their government's approval to purchase up to 600,000 ounces of palladium from the Russian Central Bank and hold a substantial stock of the metal. That amount of the element affords its controllers tremendous market clout. Whist palladium has been dentistry's most used noble metal it is chiefly utilised for auto catalysts in petrol engine vehicles and thus benefited from the switch away from diesel.

DOWNSIDE PRICE CONSIDERATIONS - any increase in electrical vehicle usage looks to eventually dent demand. Of more immediate concern might be (1) the introduction of thinner catalysts, (2) the overall slowing of vehicle production mentioned above.

 

PLATINUM: although still historically low the platinum price has, amid volatility, risen in pounds sterling. Platinum coud be substituted for palladium in petrol driven vehicles but the re-jigging of vehicle production to facilitate that change could be expensive and cause a decrease in the two metals price differential thus negating some or all of the aparent advantage of such a change over for vehicle manufacturers. Hydrogen fuel cell requiremernts could increase demand and there look likely to be new nano-technology applications for platinum.

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