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Some uncertainty remains for global markets this week. The beginning of the week saw a counter-movement where stock markets made gains and gold prices decreased. A higher U.S. dollar index led to a decrease in gold prices on Monday, but this is mostly a correction for the significant gains of the last couple months. “Gold is up two standard deviations…[S]o math is in favor of a correction short-term,” according to Frank Holmes, U.S. Global Investors CEO. We saw more risks taken in stocks on Monday as world stock markets were mostly higher, and Nymex crude oil prices were solidly higher and above $31.00 a barrel. China’s Shanghai stock index rallied 2.3% following news over the weekend that Chinese authorities announced a secondary home sales tax cut.
As we look at this week’s Market Report for Precious Metals we continue to see positive outlooks for gold and silver and some fluctuation in platinum and palladium.
Gold started last week at $1212.00 per ounce. There was a sharp increase on Thursday up to $1221.50 per ounce. On Monday, February 16th, gold is back down to $1203.65 per ounce. This leveling out is to be expected. April gold futures prices are still in a two-month-old uptrend on the daily bar chart. Gold holdings have increased by 154 tons in the first few weeks of this year. Investment in gold coins in particularly strong right now, and as long as the uncertainty in global stock markets continues, gold will continue its upward trend. The next major benchmark we will be looking for is $1263.00 per ounce.
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Silver hit $15.35 per ounce last Tuesday, February 16th, then spent a couple of days down at $15.25 per ounce. Silver spiked on Friday, hitting $15.37, and has dropped again today to $15.26 per ounce. Silver tends to follow gold closely, especially in times when stock markets are more unpredictable, as it is also considered a safe investment. Currently, silver is a bit undervalued, as there are solid physical demands. We will be looking to see if silver can hit the next benchmark of $16 per ounce.
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Platinum continued to trade between $930-$960 this week. There has been a slight increase in physical demand, but so far it has not boosted the price of platinum. Diesel car sales help boost demand for the metal as they have platinum catalysts, sales were slow in the U.S. in January, but in Europe, the major diesel market, sales were up 6.2% year over year. This is good for platinum and hopefully with some increased demand the price will make some gains.
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Palladium stayed mostly steady last week around $510, until Friday when it dropped to $501. Palladium is in the same position as platinum, demand for palladium sponge is still at a high level, but this is not being reflected in the price. The next support is formed at $490. If demand continues to stay strong and manufacturing bounces back palladium prices will rebound.
Over the nest week we will be looking at a couple of indicators, including continued discussion about the U.K. staying in the European Union, numbers on employment, and the figures on CPIs and inflation. All signs point to a continued positive trend in gold and silver. Hopefully if demand continues for platinum and palladium it will soon be reflected in the price.
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