PRECIOUS METALS

Fri 14 Jun 2019

IMPORTANT : Please note that MTD and contributors to this page are not financial advisors and the content of this page is not a recommendation to buy, sell or otherwise trade in any way whatsoever, it is simply the writer's personal views on current metal matters.

 

GOLD PRICE UP.

Concerns about a US - Iran conflict continue to encourage price speculation which has also been supported by reports that the Chinese central bank continued to be a net buyer in May.
Comments from the US Federal Reserve have been interpreted to indicate a softening of interest rates or at least no increase of them this year. Broadly speaking higher interest rates discourage the buying and holding of gold because gold pays no interest.

Simple supply of and demand for physical gold has remained of less importance to its price than the massive paper/electronic ( ie. futures, options and derivatives) market which might be supposed to be able to facillitate political as well as commercial interests. 
 

PALLADIUM PRICE HAS RISEN THIS WEEK

Palladium is dentistry's most used noble metal and after stuttering its price rise resumed: it is mostly used for auto catalysts in petrol engined vehicles so any increase in electrical vehicle usage looks to eventually dent demand subject to the volume of electric vehicle production and, likely not unrelated timing of, emission legislation. Of more immediate concern would be any overall slowing of vehicle production related to economic situations. Also worth consideration is that the supply of recycled metal is likely to increase encouraged by high prices.

PLATINUM's price has remained subdued by the decline in sales of Diesel engined vehicles which use relatively high platinum content catalysts.This situation coupled with no shortages of supplies has kept this metal's price down over the last few years. Platinum could be substituted for palladium in petrol driven vehicles but the re-jigging of vehicle production to facilitate that change would be expensive and cause a rapid decrease in the two metal's price differential and thus negate some or all of the apparent advantage of such a changeover for the vehicle manufacturers.