Precious metals have made strong recoveries since the start of October after experienced yearly lows in September.
Gold benefits from a healthy week as it posts a 2.04% price increase from last Wednesday’s price of $1,759/oz to $1,795/oz at the time of writing. The yellow bullion enjoyed a large spike on Wednesday (today). This week, the metal experienced a high of $1,797/oz as it challenges the psychological level of $1,800 with its highest price in 4 weeks. Its low this week was $1,746/oz. On a 3 month basis, the metal is now down just -0.61% compared to -4.54% at the end of September.
Gold Price (2 months)
Source: GoldSilverPrice.eu
Silver sees its prices spike twice in the last 7 days, during last Friday’s trading session and today’s trading session. Overall, the metal sees its value increase by 2.68% as its price increases from last Wednesday’s price of $22.61/oz to today’s $23.22/oz. This week, the metal experienced a high of $23.27/oz, its highest price in 4 weeks, and a low of $22.24/oz. On a 3 month basis, the white metal is down -11.96% compared to -18.51% at the end of September.
Silver Price (2 months)
Source: GoldSilverPrice.eu
Platinum prices confidently break through the $1,000 price level as the metal sees its price increase from $958/oz 7 days ago to $1,021/oz at the time of writing. This gain amounts to a substantial 6.58% increase in platinum’s value. This week, the metal experienced a high of $1,036/oz, the highest price platinum has seen in 10 weeks. It also experienced a low of $941/oz. On a 3 month basis, the metal is down -8.68 versus -19.78% in the second half of September.
Palladium gained the most this week as it watches its value increase 11.66% from $1,895/oz last Wednesday to $2,117/oz at the time of writing. This week, the metal experienced a high of $2,172/oz, the highest price in 5 weeks, and experienced a low of $1,833/oz. On a 3 month basis, the industrial metal is down -25.77% compared to -35.52% at the end of September.
Rhodium is the only precious metal that looses out this week by posting a massive loss of -15.08%. The metal dropped from $12,600/oz to $10,700/oz posting a 23rd consecutive loss week. The main reason for this sustained loss in the metal’s prices has been due to COVID-19 supply shocks that have now been solved as liquidity in the market improves.
Gains in the precious metals market were largely attributed to inflation fear sentiment over the global economy. Gold, seen as a safe haven metal, acts as an inflation hedge which with US CPI data just released, we see that inflation rose another 0.4% last month for a total of 4.0% year on year.
Two factors are limiting the gains in the precious metals market; Bond yields and the US Dollar. As bond yields increase, the opportunity cost to hold gold increases as it is a non-yielding asset. Being a dollar-denominated asset, the appreciating US Dollar has also been acting as an obstacle for precious metals to overcome.
