Looking at this week’s Market Report for Precious Metals we see some gains continue, while some metals begin to stabilize as global markets rebound from losses. While U.S. Markets were closed on Monday, February 15th for Presidents’ Day, we did see precious metals react to strengthening markets worldwide.
Weak performances in manufacturing and construction led to sharp downturns in Chinese Markets which had a ripple effect across the globe. On Monday we see Asian and European markets make gains. Simona Gambarini, a commodities economist at Capital Economics in London said, “A bit of the panic around global financial markets is coming off today.” John Plassard, senior equity-sales trader at Mirabaud Securities LLP in Geneva said, “The Chinese market didn’t react as bad as we feared and with the weak export data there is some big hope that the central banks will react quite fast. It’s a mix of hope of intervention from the Asian central bank, short squeeze and also a relief in some energy and banking sectors, the most shorted sectors.” Crude oil also made gains last week, crude futures rallied 12% on Friday, for their biggest one-day percentage gain since 2009. Those gains also contribute to better performance in global markets. We did see some gains in the U.S. today too, even as most markets were closed, futures on the Standard & Poor’s 500 Index climbed 1.5 percent as of 4 p.m. in New York.
Gold has been steadily increasing among declining markets over the last several weeks. The market gains mean that gold prices will likely be dropping a bit over the next week. This last week we saw a high of $1239.75 per ounce on Friday, February 12th. On Monday gold is down to $1208.45 per ounce. It seems like the jump for gold was a bit early overall, “Now this is a little bit of re-balancing,” said Carsten Menke, commodities research analyst at Julius Baer. Gold may drop down to $1,100 per ounce over the next couple weeks, but it will just be steadying out after the sharp gains.
Silver saw large gains over last week, gaining almost $1. On Monday, February 8th silver was $14.94 per ounce and it ended the week at $15.64. Silver is considered to be a safe investment, along with gold, so we expect to see a similar trend of slight drops to even out sharp gains.
Platinum saw gains over the last week. News of stronger markets, hope for a boost in manufacturing and gains in the auto-sector all contribute to platinum gains. Platinum started the week at $906 and ended at $957. As long as faith in the automotive and manufacturing sectors continue over the next week, as it looks like they will, platinum will continue to perform well. That also goes for palladium as it moved from $499 at the beginning of the week to $521 at the week’s end.
There is good news for markets overall to start this week. We will keep an eye on crude oil prices leading up to a potential meeting between members of the Organization of the Petroleum Exporting Countries. Markets seem to be bouncing back as shares in Europe had their biggest two-day gain in more than four years and Japan’s Topix index gained the most since 2008. Gold and silver will fall a little, but will even out overall. Platinum and palladium should continue gains this week.
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