GROW - Metals Weekly Round-Up: Election Delay Provides Tailwind for Gold
Gold continued to move higher Friday (November 6), as the US election tally dragged into its fourth day. Edging towards US$1,960 per ounce, investors looking for safe havens kept the yellow metal well above US$1,900.
A poor showing by the US dollar, which recorded its worst week since March, also aided gold’s ascent.
The presidential uncertainty benefited the broader resource sector with precious and base metals on track to end the week higher than Monday (November 2).
US Election 2020 and Gold
Is now the time to buy gold? Read what experts have to say about gold and the US Election!
By Friday, gold had added 3.6 percent to its value since opening Monday at US$1,889. The potential for a contested election added volatility to markets with the Dow Jones Industrial Average slipping 158 points Friday. Uncertainty weighed on markets, but propelled gold’s ascent.
Moving forward the election results and subsequent monetary policy will be catalysts for gold’s further climb.
According to the World Gold Council , “the combination of a high-risk, low-rate environment is expected to maintain gold investment demand for the foreseeable future. As such, investors should prepare for ongoing high volatility as market conditions adjust to emerging developments.”
Will the yellow metal enter record setting territory again this year remains unknown, however, Frank Holmes CEO and chief investment officer at US Global Investors (NASDAQ: GROW ) thinks US$2,000 is insight short term.
Watch INN’s latest interview with Holmes above.
Longer term the head of US Global Investors sees a US$4,000 threshold.
At 10:13 a.m. EST, gold was valued at US$1,942.30.
Silver also trended higher in the green from Wednesday (November 4), but experienced some headwinds Friday morning.
Hitting US$25.93 per ounce before pulling back, the white metal added as much as 8 percent this week, its best performance since early August.
Year-to-date silver has increased 43 percent from its January start, and is positioned to continue to move higher off rising industrial and safe haven demand that favour the metal.
Silver was holding in the US$25.34 range as of 10:41 a.m. EST.
Market volatility also worked in platinum’s favor, pushing the catalyst metal above US$900 per ounce for the first time since September 18. Friday morning saw platinum reach US$908 before a reversal sent the metal back to the US$890 range.
As platinum struggled to hold on to gains made since Monday’s US$849 start, palladium rocketed higher adding the most to its value in the precious metals sector.
Registering its best performance since March, palladium soared from US$2,077 per ounce November 2, to US$2,336, a 12 percent rise.
The sharp rise is closely related to the decision by Anglo American Platinum (LSE: AAL ) to close the phase B unit of its Anglo convertor plant in South Africa.
The plant has suffered several leaks and will require a rebuild, ultimately creating a bottle neck in the palladium sector. This news comes months after a “ force majeure ” forced Amplats to shut its smelter in March.
“As a result of the closure of the ACP Phase B unit, the Company has lowered its refined production and sales guidance for 2020 to 2.5 million PGM ounces (previously 3.1-3.3 million PGM ounces),” reads the press release.
At 11:14 a.m. EST, platinum was priced at US$889.50; while palladium was selling for US$2,323.
The base metals also trended higher throughout the week. Copper made a modest 1 percent climb for the first week of November. The red metal continues to trade near its year-to-date high at US$6,953 per tonne (October 21).
Copper’s gains this period have been attributed to a weakening US dollar index.
At 11:29 a.m. EST copper was moving for US$6,798.
Zinc prices soared to a year-to-date high this session, to US$2,593 per tonne. Since markets tumbled in March, zinc has added more than 46 percent to its value.
Friday morning zinc was holding at US$2,593.
After reaching its year-to-date high in late October, nickel has shed some of those gains but remains in the US$15,000 per tonne range. A resurgence in industrial demand, as supply chains strengthen has benefited the metal.
Nickel was trading for US$15,450 to end the week.
Despite rallying past US$1,800 per tonne this week, lead prices remain under pressure. The metal crept towards the US$2,000 range in mid-September.
“The [lead] price fell despite a fresh outflow of 1,400 tonnes predominantly out of LME-registered warehouses in Hamburg, while a fresh cancellation of 18,525 tonnes last week was also not enough to keep the metal’s underlying price above the nearby US$1,800-per-tonne support level,” reads a Fastmarkets report .
Prices held at US$1,836 to close the week.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.