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Prediction for the market of precious metals

Posted Sep 26, 2017

Analysts of PLAURUM have prepared the following up-to-date prediction for the market of precious metals:

At the end of August, gold quotes broke through the $1,300 level and hit their fresh annual highs against the backdrop of missiles launched by North Korea. The growth in precious metal quotes was also backed up by statements of representatives of the world's central banks at the Jackson Hole economic symposium. At the moment, the probability the Federal Reserve System's rate will be increased at the next meeting on September 19-20 is less than 1%. In this regard, the dollar has weakened.

The dollar/ruble pair has dropped below 58 RUB/USD. But from a fundamental point of view, there are not so many drivers for a further ruble strengthening. We expect an exchange rate consolidation at the level of 57-58 RUB/USD and a further return to the range of 58-61 RUB/USD. This can be explained by the current consolidation of oil in the narrow range of $50-53. It is possible to break through the point of $54 only in case of an extra cut in oil output by the OPEC countries. That is why we expect a soft decrease in oil prices within a wide range of $44-56.

Since the beginning of the year, precious metal quotes have considerably increased. Naturally, some investment funds may prefer to lock in their profits, liquidating a part of their positions. And as at the present moment the geopolitical risks are somewhat weak, we expect gold quotes to return to a level below $1,300 and silver quotes to return to a level below $17. Till the end of the year, our predicted range of quotes provides for $1,150-1,380 per ounce for gold and $15.5-18.5 for silver.

In August 2017, palladium hit fresh all-time highs reaching the $990 mark. During the year, the physical market witnesses a severe shortage of this metal. Because of this, the backwardation between futures and spots could reach 30 dollars. But at the present moment, the backwardation dropped down to 4 dollars and it is likely to be expected that the growing trend will end soon.

Platinum is an outsider among precious metals in 2017. Investors preferred to invest in gold and palladium. But in July-August, the situation changed a bit and platinum quotes increased by 11%, leaving the support level of $900 and reaching the psychological level of $1,000. In this case, investors were boosting long positions in this metal. It can be expected that the second half of the year will see a switch in investment interest from palladium to platinum. That is why the platinum price could reach the range of $1,100-1,150, and palladium quotes could drop to the range of $850-900.

Similar to palladium, iridium and rhodium quotes have also grown considerably in 2017. The iridium price has increased from 700 up to 970 dollars and the rhodium price has left the $770 mark and reached the level of 1,155 dollars. The physical market also witnesses a shortage of these metals. Due to this, iridium and rhodium prices will stay high till the end of this year.


email: mail@plaurum.ru
website: www.en.plaurum.ru

About Plaurum: Plaurum brand incorporates production facilities in Russia (JSC “EZOCM”, JSC «UPCR», LLC «UPCP»), Central Europe (Safina a.s.), and the People’s Republic of China (Guoda Safina), as well as sales offices in the USA, Slovakia, Poland, Romania, and Kyrgyzstan. The Group is developing the following major dimensions: processing poor man-made and mineral hard-to-extract raw materials containing precious metals, providing services of purchasing, processing, refining, and delivering refined precious metals, manufacturing industrial materials and goods from alloys based on precious metals, providing engineering services on developing new technologies and products, analyzing different types of raw and other materials containing precious metals, developing qualifications and a service package on rare-earth and non-ferrous metals.

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