If you’re an avid follower for the spot price of precious metals, as well as the future delivery prices, you’re no doubt accustomed to the roller coast ride the market has presented in 2016. In recent weeks, prices have been jumping around quite a bit, but the overall trend at the moment is pointing toward a cooling market with prices retreating from their post-Brexit highs of June and July. Below is a breakdown of activity in recent weeks for gold and silver, as well as a look forward at gold, silver, platinum, and palladium.
End of September
On the 29th of September, gold futures posted a higher closing price than the previous three days, and silver had snapped a four-session losing streak in its prices. At that point, gold for delivery in December had gained $2.30 to close at $1,322 an ounce on COMEX listings. Overall, gold had been trading between $1,318.60 and $1,329.40.
Silver for December delivery rose 6.7 cents at the time to close at $19.18 an ounce, and was trading between $19.05 and $19.46. Although not as red hot at the time as both metals had been post-Brexit, gold had inched higher and silver snapped its losing streak. The ups and downs were just starting though.
3rd Quarter Results Announced
September 29th was one day before the end of the third quarter, and one day before figures would be tallied for the period and results announced. The news for gold and silver was mixed. Come October 1, gold futures had declined to pull prices lower for the week and into the red for the third quarter as a whole. All that said, gold had advanced in September and was markedly higher on the year so far.
Gold for December delivery was now at $1,317.10 per ounce, a declive of $8.90 and the lowest mark since mid-September. Futures were down 1.8% that week, but up 0.4% for September on the whole. The quarterly loss for gold stood at 0.3%. However, on the year-to-date, gold was up 24.2% from its close in 2015 of $1,060.20 per ounce.
Meanwhile, silver for December delivery had risen 2.6 cents to settle at $19.21 per ounce. Futures dropped 3% in the final week of September, but experienced monthly gains of 2.7% and a 3.2% gain for the third quarter. On the whole, silver was up 39.2%, or $5.41, for the year.
The third quarter results for precious metals also offered insight into the performance of platinum and palladium prices. Platinum lost $2.70 for January delivery, landing at $1,034.50 per ounce. That was a decline of 2.1% for the final week of September and 1.8% for the entire month. Palladium for December delivery added $2 to $721.50 per ounce, with gains of 2.1% for the final week in September and 7.7% for the entire month.
It was good news all around in the third quarter analysis for platinum and palladium. The metals registered gains both in the third quarter and year-to-date, with platinum rising 1% in Q3 and 15.8% on the year, and palladium rising 20.8% and 28.4% respectively.
Continued Cooling in October
September results and third quarter 2016 results hit on a Friday, and come Monday morning, October 3rd, things were looking much different. Precious metal futures declined by Tuesday, October 4th with silver and gold both posting three-month lows. Gold for December delivery plummeted 3.3%, dropping $43 to finish at $1,269.70 on COMEX. That’s the lowest settlement figure since the day of the Brexit vote on June 23, 2016.
The news wasn’t much better for silver, which dropped 5.8%, or $1.09, for December delivery to settle at $17.77 per ounce. Platinum and palladium also suffered stinging losses for January and December delivery, respectively. Platinum fell $18.60 to $990.50 per ounce, while palladium dropped $12.25 to $699.55 per ounce.
All four precious metals were still trading in broad ranges, with most above their December and January delivery prices. Gold futures traded between $1,269 and $1,315.40, which is down 3.6% for the first week of October so far. Silver was trading between $17.74 and $18.94. Platinum’s range was $988 to $1,013.60, while palladium ranged from $696.50 to $714.95
Of course, this was all as of Tuesday this week. Come Wednesday morning, the tumbles continued for gold and silver, though losses were lesser than Tuesday’s sharp drops. Gold dropped value for December delivery for a fourth-straight day, ending at $1,268.60. Silver was lower by 8 cents, platinum declined $13.90, and palladium dropped $23.95.
What’s Behind the Cool Down?
There are a number of key factors behind the cooling trend in precious metals at the moment. The stronger US Dollar is always a bad sign for precious metals, and the USD has been gaining on both the Euro, and more impressively, the Sterling Pound. Also contributing is weak physical demand for gold and silver in China and India.
