Precious metals rise as platinum leads the market higher

Precious metals prices continued their upward move Thursday, erasing more of their decline from earlier in the week and moving back to a short-term high set last month.

Here’s what’s happening in the metals markets
  • Front month Gold GC00,
    Futures rose 0.5% to trade at $1,858 an ounce; The yellow metal is now up 1.6% year-on-year.

  • silver SI00,
    up 1% to $22.15 an ounce; it has remained down more than 5% year to date.

  • platinum PL00,
    built on its notable gains from yesterday’s session to trade 1.5% higher to $1,011, recrossing the psychologically important $1,000 an ounce level.

  • Palladium PA00,
    rose 0.4% to $2,010 an ounce.

Citi’s Aakash Doshi, a precious metals analyst, recently lowered his short-term price target for gold, arguing that a confluence of factors are working to keep the precious metal’s price in check.

“A hawkish Fed, higher real interest rates and still-anchored medium-term inflation expectations (both in surveys and in bond market prices) have weighed on gold price momentum in a relatively resilient environment [U.S. dollar] Background. It also seems likely that some geopolitical risk premiums have eroded as the market absorbed the Russia-Ukraine conflict,” Doshi wrote in a note to clients.

Elsewhere, a team of analysts at Commerzbank explained why platinum prices have been outperforming recently, citing expectations of increased demand from the auto industry as the supply chain crisis eases.

“Platinum should benefit from the increased demand from the automotive industry expected by market observers such as Johnson Matthey and Metals Focus this year,” writes Daniel Briesemann from Commerzbank

It’s worth noting that platinum has risen in each of the last five trading days, gaining around $50 and driving the discount to gold to just $850 an ounce, its lowest level since March.

The outlook for industrial metals was more mixed as aluminum prices fell and copper rose after a popular indicator of US manufacturing activity – the S&P Global US Manufacturing PMI – showed activity slowing to a four-month low in May.

This is how industrial metals were traded
  • Aluminum traded on the London Metals Exchange fell 4% to around $2,700 a tonne.

  • Copper rose 3% to $4.47 a pound. Precious metals rise as platinum leads the market higher

Brian Lowry

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