After having dropped tremendously since the start of 2021, Gold prices have seen a slow but consistent uptrend in the last 7 days. Increasing 3.3% from $1,680/oz to $1,735 in the last week as it struggles to break past $1,740. Silver which has come off the volatility it experienced in the last few months made very little movement in the last week. The white metal experienced highs of $26.42/oz and lows of $25.47 while closing off today just 0.39% higher than 7 days ago at $25.89. Similar to Gold, Platinum has made a relatively decent recovery in the last week, increasing 2.98% from $1,176/oz to $1,211. Palladium was subject to a very healthy growth this week increasing a generous 7.64% from $2,342/oz last week to $2,478 while experiencing highs of $2,534. Rhodium, the precious metal of the decade, experienced a parabolic price trend in the last 7 days. It started on the 10th of March at $26,500/oz, dipping to $24,600 over the weekend and recovered up to $25,250 today. This resulted in a decrease in price of 4.72%.
Gold’s slight uptrend happens right before Wednesday’s European conference and the US Federal Reserve’s monetary policy meeting with the Federal Open Market Committee (FOMC). The meeting between the US Fed and FOMC will discuss the bond market and attempt to lower expectations that interest rates would increase as soon as the end of 2022. Depending on the outcome of the meeting, US bond yields could go through another spike ultimately hurting gold prices in the short term and long term.
The US dollar gaining strength has put Silver under pressure in the last week causing the slight dip. The white metal is also dependent on the outcome of the 2-day FOMC meeting with the US Fed. A more general concern seems to be that the demand for silver, and other commodities in general will be affected by the suspension of the AstraZeneca vaccine in EU countries. Germany was the first country to put the suspension in play.
The price leap in Palladium is caused by the Russian mining company Norilsk Nickel, which is expected to experience a large drop in supply due to a recent flooding that affected two of its mines. Expectedly, the cut in supply has caused the price to jump abruptly. The company released a statement saying the mines would take up to four months to return to pre-flood production levels. As the world’s largest Palladium producer this has heavily affected the global supply.
PALLADIUM FUTURES (1 MONTH)
Source: Tradingview, PALLADIUM FUTURES 30 NYMEX
The recent drops in Rhodium prices have been attributed to insecurities. Many analysts believe that auto-makers might not be able to bear the astonishingly high prices of Rhodium in the long-run. Despite this, Rhodium remains the metal that reduces NOx emissions, although Palladium is undergoing rigorous testing to do the same.
Much uncertainty is right around the corner with the implementation of global post COVID-19 pandemic budgets including the massive $1.9 trillion US stimulus. Optimism seems to still outweigh pessimism although as the clock ticks, the pessimism grows.
