Gold and Silver Market Update (11/3/14) – Golden Eagle
Last week was another very mixed bag for precious metal investors. Once again we saw falls in the key gold and silver prices, and these were a lot bigger than the preceding period. In fact silver in particular is back in as much trouble as it seemed to be in early October. On the other hand the picture still looks at least a bit better in the platinum group, with prices stable or still rising there.
The main driver through the week seems to have been recovering strength in the equities markets. A 500-point rise in the Dow coupled with similarly bullish performance from the London and Frankfurt exchanges looks to be drawing investors back to stocks, and eating away at the appeal of gold and silver as a hedge. On the other hand palladium and rhodium still look seriously undervalued and combined with continuing strong industrial demand that looks to be holding prices up in that sector.
Anyway, starting with gold the spot price fell all week, dropping a full $66.75 from Monday’s start to close the period at $1,164.25. This is the biggest fall we’ve seen in gold for weeks and it blows away any hope of support developing above $1,200. It’s also a new four-year low and there’s a strong possibility it could fall even further before starting to regain some ground. Bad news for anyone who’s already holding a supply, but worth keeping an eye on for the future – the current price is a bargain and likely to become more of one.
Silver had an even worse week than gold. From an already low start at $17.20 it dropped more than a dollar to finish just above $16.17. We’ve been concerned about a fundamental loss of confidence in silver and this points strongly in that direction. Given the Dow’s performance we’d have expected to see some movement away from metals, but not a fall of this extent.
Platinum saw another modest fall, dropping $13 to close at $1,232. This wasn’t much more than it lost the week before and while still disappointing it was nowhere near the damage done to gold or silver prices. We had hoped to see a rise last week, but it’s not out of the question sometime this month.
Moving on to palladium, the picture’s a lot brighter. Following on from a $25 rise the week before, it added another $15 to close at $791. Healthy demand from the auto industry is most likely pushing that but it’s also going to make the metal seem like an attractive investment in its own right. This should help sustain the rise, so we expect palladium to comfortably top $800 next week.
Finally rhodium took a couple of minor dips but regained almost all the lost ground, closing the week at $1,190. Rhodium is very volatile at a small scale just now, with frequent rises and falls, but the overall trend is steadily upwards.
So, another mixed week, and definitely a bad one for the most popular metals, but there are some promising signs of life in the sector as well. Right now the best advice is to buy palladium and rhodium, but hold back on platinum. As for gold and silver, wait for them to finally find a hard floor then buy in to take advantage of the recovery.
About the Author: Clint Stelfox
Clint is the director of marketing at Golden Eagle Coins. Son of Richard Stelfox, co-founder of the company, Clint has been living and breathing coins his entire life. After trading for a Philadelphia Stock Exchange firm for several years Clint returned to give Golden Eagle the online presence it has today. 
