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Precious metals rallied this week and gains were made all around. Gold’s price has increased to $1,753/oz, a 2.33% increase since the start of the month when it started at $1,713/oz. Silver too made healthy gains this week, following a similar trend to the yellow bullion. Prices for Silver ended the week at $25.42/oz, 4.48% higher than the start of April. Platinum neared 10% gains this week as it increased its prices from $1,123/oz at the start of the month to $1,227/oz today. Palladium, unlike the rest, had its prices remain relatively stagnant during this period. Since the start of the month, the price for the metal has dropped 0.85% from $2,685/oz to $2,662/oz. Lastly, Rhodium made substantial gains, on par with Platinum. The metal gained 9.39% since the start of the month when it was priced at $26,600/oz to $29,100/oz today.
Gold prices recovered this week after they had dipped below the $1,700 level at the end of last month. This gain was largely attributed to the US dollar and the US Treasury yields both decreasing since the start of April. Federal Reserve Chairman Jerome Powell added that inflation would likely rise this year, yet it would be temporary. If the US dollar rally retreats, then it is likely we will see a gold breakout above $1,800.
Gold Price (3 months)
Source: Tradingview; Gold Futures 3 months COMEX
Despite serving remarkably similar purposes, Platinum and Palladium had a very different start to the month. This is largely because of Palladium's massive gains that occurred after the news was released about 2 Russian mines shutting down due to complications from flooding. So, despite not having experienced the gains made by the precious metals market this week, the environment surrounding Palladium remains very bullish as global demand exceeds global supply.
Rhodium continues to dominate in terms of gains. In the last year, Rhodium has had a 304% gain and is now headed towards its previous all-time high of $29,600. It is believed that Rhodium remains a short-term investment rather than a long one. The strong push for the arrival of electric vehicles by governments and consumers alike has resulted in increased emission regulations and more incentives towards owning and manufacturing electric vehicles. Once these alternative fuel vehicles become the norm, there will no longer be a need for Rhodium which is currently the only metal able to reduce the amount of NO2 emissions. Furthermore, the enormous increase in price in the last year has caused manufacturing plants to either cut down production or completely halt operations at plants.
There is no way to predict where the market will go as different regions are experiencing different levels of optimism and uncertainty. Many European cities are headed into a 3rd lockdown while countries in Asia and the US are starting to lift restrictions and return life to what it was before. There are many reasons for the price of precious metals to rise, but many factors are also showing a bearish side.