The price of gold, silver and palladium rose in connection with the rhetoric of the fed

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Last week the price of gold, silver and palladium rose in connection with the rhetoric of the US Federal reserve and optimism after the G20 summit. The price of platinum continued to decline due to weak fundamental data. Support was also provided by the criticism of the fed by George. Powell and U.S. President D. trump.
As a result of this criticism the fed chief said that the current policy of the regulator is close to neutral, which the market perceived as a possible slower pace of rate hikes. However, the abolition of a rate hike at the December meeting is still not expected. Based on projections of the U.S. Federal reserve, we can say that the regulator intends to hold three raises in 2019 and one in 2020 increasing, but the market expects lower rates of change rates that generally will increase the volatility.
The November drop in oil prices in peak season consumption in the United States reduces inflationary pressures in the country, depriving the fed reason to justify raising rates, which played a role in the softening of rhetoric and supported the precious metals markets.
Last week the gold stocks ETF-funds has not changed, the reserves of silver and palladium funds have declined, and grew up platinum.
Also last week, there was a significant reduction in short positions in gold, which is associated with the rhetoric of the fed.
Prices on precious metals in Shanghai on SGE in the past week also declined, the yuan to U.S. dollar strengthened after the G20.
The demand for gold in Asia last week increased slightly due to lower prices in regional currencies. Award for delivery of gold in China last week rose to $6/7 per ounce, the premium on gold delivery in Singapore rose to $0,7/0,9 per ounce in Hong Kong, the award has grown to $0,9/1,5 oz. Gold in Tokyo was trading at parity with London.
Demand in India during the past week continued to grow due to the small drop in local prices due to the strengthening of the rupiah value. Award for the supply of gold remained at $2/ounce.
After the G20 summit, the markets were gripped by optimism, in connection with which gold prices have gone up $1240 by testing the level of $1246. If the price fixates above the level of $1240 should we expect the release of the gold market to the levels of $1260-1280.
Silver prices in correlation with the market gold rose from $14,125 to $of 14.66. The ratio of gold to silver has expanded to a new record and is 85.55 points. The ratio of platinum to silver dropped and is 55,26 points.
Platinum prices in the past period continued to decline from $847 to $800. The platinum market remains fundamentally in a negative state, despite the positive expectations in Sino-American relations and commitments to lower import duties when importing American cars to China. The spread between gold and platinum is $425/oz. The spread between platinum and palladium has widened to a new record level of $397/oz.
According to the report, WPIC, the balance of the world’s platinum market in 2018 one gets excessive in the amount of 505 thousand ounces. World production of platinum in 2018 will amount to 7,975 million ounces, and the consumption – 7,470 million ounces. The production in South Africa continues to decline, which, however, does not compensate for falling demand in the automotive industry. Jewelry demand also remains weak.
In 2019, the excess of platinum on the world market will be reduced to 455 million ounces. Platinum supply will rise to 8,105 million ounces in connection with the growth of production and recycling. World consumption of platinum will rise to 7,650 million ounces due to an increase in jewelry, industrial and investment demand. Significant substitution of palladium with platinum is expected. Terrestrial platinum reserves in 2019 will grow significantly and will make 3,120 million ounces.
The palladium price rose last week from $1113 to a new record level of $1177 under the influence of optimism on the US stock market and the expected recovery in the economy.
Oksana Lukicheva
Analyst of commodity markets,
“Opening Broker”