Precious metals continue to move sideways

The precious metals sector got off to a weak start in November, only partially recovering its losses over the course of the month. This means that the sector is still trending sideways slightly downwards. Gold lost 3.6 per cent in the meantime, then ended the month at 1,463 US dollars per troy ounce, which corresponds to a minus of 3.3 per cent. Silver closed at USD 17.02 per troy ounce and lost a little more at 5.8 percent. “Gold remains neglected because equity markets are currently attracting a lot of investor interest. But the longer-term upward trend will only be in jeopardy if the price falls below the 1,380 US dollar mark. In view of the many uncertainties in the financial system, there is no way around gold,” says Martin Siegel, precious metals expert and managing director of Stabilitas GmbH.


The price difference between platinum and palladium increased for the third month in a row. Platinum fell back below the USD 900 mark at -5.8 percent and closed at USD 896. Palladium, which had meanwhile reached an all-time high again, ended the year at USD 1,842, up 1.9 percent. “The palladium boom continues to be driven by high industrial demand. However, it remains the case that the further the price range diverges, the more attractive it will be to replace palladium with platinum,” says Siegel.


The shares of the mining companies developed unevenly in November. In addition, major mergers are once again taking place in the sector. The Australian company Saracen acquired 50 percent of Barrick’s Australian Super Pit for 750 million US dollars. Evolution, which is also Australian, bought the Canadian Red Lake Mine from Newmont for 475 million US dollars. “The takeover of Detour Gold by Kirkland Lake brings Canadians closer to the market leaders Newmont, Barrick and Agnico Eagle,” says Siegel. Further takeovers are likely to follow.


The base metals suffered double-digit losses in some cases: Lead (-10.3 percent). Zinc (-9.5 percent) and aluminium (-0.9 percent). Copper alone (+1 per cent) was up. The hardest hit was nickel (-17.8 percent), which thus lost almost a quarter of its value over the 3-month period. “This movement cannot be explained from an economic point of view. One should not forget, however, that nickel is still clearly up over the year,” says Siegel.


Brent oil experienced an unspectacular month. At +1.2 percent and a closing price of USD 62.43 per barrel, the oil price hardly changed. “Interestingly, the oil price is moving sideways stably. This development does not indicate economic problems,” concludes Siegel.


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