Precious Metals Weekly
Group Economics Macro & Financial Markets Research
Rout in precious metals
Georgette Boele, tel,+31 20 6297789
8 July 2015 • • •
Silver prices also break out on the downside Cyclical precious metals badly hurt… …while gold is not living up to its safe haven status again
Silver prices also break out on the downside
gold price has coincided with a buildup and liquidation of
Silver prices followed palladium and platinum prices in
outstanding investor positions in gold. This is not a positive
breaking out on the downside. In a brutal move, silver prices
development for a safe-haven asset, because significant
dropped yesterday below USD 15 per ounce. The outlook for
investor activity could indicate that it is used for speculation
gold prices has deteriorated sharply, only the support level of
rather than as a safe haven.
USD 1,130 per ounce stands currently in the way in order to avoid a sharp move lower.
Recent price action in gold prices points suggests that gold is not living up its safe haven status again. Investor sentiment
Cyclical precious metals badly hurt
has deteriorated because of sharp fall in Chinese equities and
Cyclical precious metals have been sold off aggressively this
the Greek debt crisis, but gold prices have gone down instead
year, especially platinum and palladium. The latter is mainly
of up. This is because investors have liquidated precious
the result of investors abandoning the precious metal as it has
metals in general, the outlook for Chinese jewellery demand
failed to produce higher prices on the market’s view of a
has deteriorated weighing on gold, silver and platinum prices
substantial supply deficit. In general, the market
and the US dollar has remained relatively strong. Looking
underestimated the negative impact of investor position
ahead, higher US dollar and higher US rates will push gold
liquidation. We have been forecasting lower palladium prices.
prices towards USD 1,000 at the end of this year in our view.
It took a long time to materialize, but in the end the move has even surprised us on the downside. Our end of September
Precious metal prices out of favour
target of USD 650 per ounce (which was also our June target)
Performance in % with USD as basis
has been broken easily. Prices have moved in tandem lower
0
with net positions (substantial increase in short positions). If Chinese equities were to fall further and investor sentiment were to deteriorate, palladium prices could reach USD 600 per
-5 -10
ounce. -15
The Greek no-vote and the concerns about China have also weighed on platinum prices. If the situation were to linger on, platinum prices could drop further and this would mean that we
-20 -25 Gold
Silver
were to quickly in becoming positive on platinum. Gold’s being a safe haven?
Platinum
Since 1 July
Palladium
YTD
Source: Bloomberg
The gold market has dramatically changed with the arrival of gold products that opened the market to a wider public. Gold is
ABN AMRO forecasts
not only bought as a protection for uncertain times but also as
End period Gold Silver Platinum Palladium
08-Jul Close 14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 1,150 1,185 1,184 1,172 1,100 1,000 950 900 850 800 15.7 16.6 15.7 14.9 17.5 18.0 15.0 16.0 16.5 17.0 1,016 1,216 1,141 1,081 1,150 1,200 1,250 1,300 1,350 1,400 798 736 674 634 650 650 675 675 700 725
Average Gold Silver Platinum Palladium
Q1 15 1,218 16.7 1,194 786
a means to speculate. The latter goes completely against gold’s safe-haven character and at times it more than overshadows it. For example, at the height of the global liquidity crisis (when there was a shortage of liquidity) gold prices dropped sharply because investors valued cash more than gold. This suggests that at times of severe crises, gold could not live up to its safe-haven status. The variation in the
Q2 15 1,193 16.4 1,129 759
Q3 15 1,136 15.4 1,115 662
Q4 15 1,050 15.5 1,175 650
Source: ABN AMRO Group Economics
2015 Q1 16 Q2 16 Q3 16 Q4 16 825 1,149 975 925 875 17.8 16.0 16.3 16.8 17.3 1,153 1,225 1,275 1,325 1,375 714 663 675 688 713
2016 900 17.0 1,300 684
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Precious Metals Weekly - Rout in precious metals
Precious metals Gold prices per troy ounces Gold price in USD Gold price in EUR Gold price in JPY Gold price in CHF Gold price in GBP Gold price in INR Gold price in CNY Gold price in BRL Gold price in RUB Gold price in TRY Silver prices per troy ounces Silver price in USD Silver price in EUR Platinum prices per troy ounces Platinum price in USD Platinum price in EUR Platinum price in JPY Platinum price in CNY Palladium prices per troy ounces Palladium price in USD Palladium price in EUR Palladium price in JPY Palladium price in CNY Palladium price in BRL Palladium price in INR Palladium price in RUB Gold forw ard rates LBMA 1 Month Gold Forw ard Offer rate BBA LIBOR USD 1 Month Gold 1 Month Lease rate LBMA 3 Month Gold Forw ard Offer rate BBA LIBOR USD 3 Month Gold 3 Month Lease rate Volatility 1 month gold option volatility 1 month silver option volatility 1 month platinum option volatility 1 month palladium option volatility COMEX & NYMEX positions NET LONGS - GOLD (COMEX) NET LONG ON SILVER (COMEX) NET LONG ON PLATINUM (NYMEX) NET LONG ON PALLADIUM (NYMEX) Total ETF positions Total Know n ETF Holdings of Gold Total Know n ETF Holdings of Silver Total Know n ETF Holdings of Platinum Total Know n ETF Holdings of Palladium Relative Gold/Silver ratio Gold/Platinum ratio Platinum/Palladium ratio Source: Bloomberg
Close
Change 1 Day in %
Change 5 days in %
Change YTD in %
1,150 1,045 139,895 1,086 746 73,162 7,141 3,664 65,859 3,102 Last 15 14 Last 1,016 922 123,529 6,305 Last 634 576 77,191 3,940 2,021 40,365 36,350 Last 0.07 0.19 0.12 0.10 0.28 0.19 Last 13.43 27.07 19.00 25.53 Last 74,769 21,160 23,898 8,101 Last 51,098,284 623,609,934 2,698,906 2,963,028 Last 77.29 1.13 1.60
-0.45 -1.19 -1.06 -1.11 -0.45 -0.41 -0.59 -0.65 -0.45 -0.51 Change 1 Day in % -1.68 -2.26 Change 1 Day in % -2.63 -3.26 -3.15 -2.69 Change 1 Day in % -2.94 -3.47 -3.35 -2.89 -2.96 -2.70 -2.70 Change 1 Day in % -27.78 -1.01
-1.60 -1.25 -2.97 -2.05 -0.53 -1.79 -1.67 -0.02 1.09 -1.67 Change 5 days in % -5.01 -4.44 Change 5 days in % -6.73 -6.17 -7.79 -6.56 Change 5 days in % -9.68 -9.20 -10.58 -9.42 -7.96 -9.54 -6.81 Change 5 days in % -13.33 -0.05
-2.93 6.40 -1.74 -8.03 -2.15 -2.56 -3.21 16.51 -0.71 11.67 Change YTD in % -5.27 4.13 Change YTD in % -16.49 -8.12 -15.15 -16.41 Change YTD in % -20.58 -12.77 -19.50 -21.09 -4.70 -20.15 -21.95 Change YTD in % 252.94 8.91
-13.64 -0.02
5.56 0.19
0.00 11.21
Change 1 Day in % 3.37 3.49 3.33 0.26 Change net 5 days -26,119 -8,317 1,915 -1,007 Change net 5 days -97,646 938,779 15,036 -3,549 Change 1 Day in % 1.07 2.16 0.21
Change 5 days in % 4.96 18.69 16.24 5.37 Change net 1 Month -33,381 -36,409 -2,675 -8,554 Change net 1 Month -100,536 5,552,780 39,989 -924 Change 5 days in % 3.32 5.25 3.18
Change YTD in % -22.19 -8.79 16.24 18.02 Change net YTD -30,456 -12,572 -6,052 -13,917 Change net YTD -290,956 499,086 -24,988 -103,862 Change YTD in % 2.16 15.86 5.24
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Precious Metals Weekly - Rout in precious metals
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