GROW - Metals Weekly Round-Up: Weak US Dollar Pushes Gold Higher

Stating the week at US$1,832 an ounce, gold prices rallied strongly climbing as high as US$1,893.20 by Thursday (December 17).

An uptick in value for the US dollar weighed prices for the yellow metal down Friday (December 18), pulling it farther away from the US$1,900 threshold.

The rest of the precious metals also climbed higher over the five-day period; however palladium was unable to sustain its US$2,200 level throughout the week, slipping below the mark twice before rising back.

Following a month of declines gold prices reached a 30 day high this session approaching the US$2,000 level. Some of that momentum was lost late in the week as the US greenback pulled away from its year-to-date low.

“What you’re seeing in terms of the gold markets today is a little bit of dollar strength after a very poor week for the US dollar and a very good week for gold,” Michael Hewson, chief market analyst at CMC Markets UK, told Reuters Friday .

Gold had been trending lower throughout November, as optimism around vaccines increased. Although some of that has been reversed this week as positive cases of COVID-19 increase rapidly around the globe.

Adrian Day, of Adrian Day Asset Management, spoke to INN about the impact the various vaccines will have on the price of gold.

“In and of itself, this is a negative influence on central bank willingness to pump excess liquidity into the system,” he said. “But many questions remain: the testing period for the vaccine has been dramatically shortened to months rather than years, so there may be longer-term negative affects we do not yet know about; there are many who will be cautious of being a “Guinea pig” and will want to wait.”

Day went on to note that, “even a successful roll out will not cause the economy globally to return to pre-COVID levels immediately and regardless of aggregate numbers, there will be pockets—sectors, geographies—still severely struggling.”

Gold was priced at US$1,887.15 as of 9:29 a.m. EST.

Silver prices also spent the majority of the week climbing higher, holding above US$23 per ounce. Year-to-date the white metal has added 43 percent to its value. Silver’s ability to rise amid market chaos was highlighted by Global US Investors’ (NASDAQ: GROW ) Ralph Aldis in the 2021 Silver Outlook.

“When you’re dealing with a real bull market in precious metals, silver’s typically at three times the price move to gold,” said Aldis . “That’s fairly common because of reduced opportunity to actually invest in silver, that just keeps it that more volatile.”

The dual metal’s ability to outperform sister metal gold, was also a topic of conversation during an interview with Resource Maven, Gwen Preston and Peter Krauth. The duo are teaming up to publish a silver-focused  newsletter.

Listen to Preston and Krauth make a case for silver investment.

“If you look at how silver performed this year, from say the March bottom to the August peak, we were looking at something like a 140 percent return in silver versus gold‘s 38 percent return,” said Krauth. “Thirty-eight percent versus 140 (percent) shows you how silver can clearly easily outperform gold in rallies and in longer-term bull markets.”

Silver was trading for US$25.77 at 10:38 a.m. EST.

Platinum rose to a year-to-date high this week, breaching the US$1,040 per ounce level. Prices for the precious metal have been edging higher since mid-November. Palladium experienced volatility throughout the session. Pushed as high as US$2,243 per ounce on Tuesday (December 15) prices fell as low as US$2,166 on Wednesday (December 16).

By week’s end the autocatlyst metal had regained some lost ground to hold above US$2,200.

Friday morning saw platinum selling for US$1,032; and palladium was selling for US$2,224.

Economic recovery hope continued to propel copper higher this week. The red metal surpassed its previous year-to-date high to rally to US$7,893 per tonne late in the period.

Analysts remain optimistic that the base metal will benefit from the widespread vaccine rollout.

“Although vaccines will not resolve the pandemic in Q1, we expect the encouraging vaccine news to provide a boost to confidence and spending in Europe and the US, which has led us to raise our economic growth forecasts in the first quarter of 2021,” Charlie Durant of CRU Group told INN .

Copper was holding in the US$7,900 range Friday morning.

Zinc prices also hit a year-to-date high this week. Since dipping to a low of US$1,773.50 per tonne in March, zinc prices have surged back 60 percent.

As of Friday morning zinc was valued at US$2,841.50.

The base metals rally continued for nickel as well, as it also pushed to a year-to-date high on Monday, US$17,594 per tonne. The price pulled back a day later but was able to end the week holding at US$17,520.

According to sector analysts : “Following a year of excess supply, Roskill forecasts that the market will remain in surplus in 2021, although it is expected to be significantly smaller than the surplus expected in 2020. Benchmark Mineral Intelligence is also expecting a surplus next year, while Woodmac is expecting a balanced market.”

Nickel prices sat at US$17,520 Friday.

Unlike the other base metals lead faced price pressure this week. Values hit a five-day high on Wednesday (US$2,062 per tonne) and have since pulled back.

Lead was valued at US$2,046 Friday.

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.