Welcome back to our weekly precious metals market update, where we provide you with a comprehensive overview of the performance of gold, silver, platinum, and palladium. Whether you are a seasoned investor or someone considering precious metals as an investment option, this update will equip you with valuable insights into the recent performance of these timeless assets.
A very interesting week for Gold as the primary drivers for the yellow metal kicked in late after a down open. The equities markets continued their run early in the week reaching another all-time high on Wednesday before the Consumer Price Index data and the perpetual conflict in the Middle East escalated. The Dow lost half its weekly gain on Thursday and Friday before the close, while Gold rallied off the profit-taking early in the week. Gold opened at $2,045.69, dipped early and rallied on the Thursday news to close at $2,049.86.
It is difficult to explain the lack of attention to the volatile situation with the United States and Great Britain attacking Houthis outposts in Yemen. The Houthis are an Iranian proxy. Iran has agreed to join the BRICS Alliance and is already conducting oil sales outside of the Petro-Dollar with Russia and China. While the military action by the U.S. and Britain was defensive following weeks of maritime attacks by the rebels, the next move by Iran, Yemen, Russia or China is critical for geopolitical tensions which is extremely critical to the direction of the U.S. Markets as was demonstrated late in the week. The fundamentals for both Gold and Silver are solidly in place and any disruption geo- politically or economically could signal a flight to the safety of metals. The CPI came in higher than expected for December, dampening the hopes that the Fed will follow up on the pause and end of interest rate hikes.
Silver followed her big sister with a weak open followed by a rally late to tread water for the week finishing exactly to the penny where she started. Opening and closing at $23.20 pretty much explains the week as the trading range was a tight 62 cents. Silver is settling in once again in lock step with Gold. This is not a bad thing. The shiny metal has the ability to step out of Gold’s shadow as it has exhibited several times in the last 18 months. The cover of the coat tail enjoyed by Silver will come in handy as the war drums get louder and the uncertainty of the economy gets more visible.
Dropping from the opening bell, Platinum’s high was its open. Platinum opened trading at $963.10 and closed at $912.00. As discussed previously, there are two factors that might point one to buying the Platinum family of metals. First, the estimated production cost of Platinum is $900.00 per ounce. Once the above ground inventory is exhausted, expect a dramatic increase in pricing. Second, Russia is the second largest producer of Platinum. It has been 20 years since Platinum and Palladium reached parity. At close on Friday, they were only $60.00 apart. Palladium opened at $1,030.10 and closed at $973.35. The Platinum family is a victim of the Global Manufacturing slowdown. Nothing can change that until the world economy picks up again.
Outlook and Conclusion
Since the turnaround in market sentiment in November ’22, the Dow Jones is up 24%, the S & P 500 is up 15%, and Gold is up 12%, and Silver is up 11%, and the US Dollar is down 4%. Diversification is key to a balanced portfolio. There is never a bad time to buy Gold and Silver, but some times are better than others.
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