Precious metals in a sideways trend

The sideways movement in precious metals that had been underway since August continued in October. Silver gained 5.7 percent over the month, closing at USD 18.02 per troy ounce. In the last three months, it was the sixth time overall that the precious metal broke through the USD 18 mark from below. Similarly, gold has moved around USD 1,500 over this period. It ended October at just over USD 1,505, a slight gain of 1.6 percent. “At the moment it is completely unclear in which direction gold will move. In the medium term, falling interest rates and thus further flourishing stock markets are not a good signal for gold. In the long run, however, permanently low interest rates weaken confidence in currency stability. Historically, this has been positive for precious metals in the vast majority of cases,” says Martin Siegel, precious metals expert and managing director of Stabilitas GmbH. “Gold is close to historical highs in practically all currencies, so it is no longer cheap. But if you look at other tangible assets, such as the real estate markets, there is still an upward potential of more than 20 percent for gold,” says Siegel.


The price range between platinum and palladium continues to diverge. Palladium is climbing from all-time high to all-time high, ending the month up 6.2 percent at USD 1,800. Platinum gained 4.1 percent, slightly less, and closed at USD 918. “Sooner or later this trend will weaken or even reverse,” says Siegel. There would be no fundamental reasons for further significant rallies in palladium. “Especially in the automotive industry, palladium will be substituted by platinum, which is cheaper,” says Siegel.


In the case of shares in mining companies, slight profit-taking was observed in October. “On an annual basis, the sector is up about 50 percent. Since we are ultimately dependent on the price of gold, which has been trending sideways for months now, profit-taking is inevitable,” says Siegel.


The base metals developed largely positively in October: zinc (+5.6 percent), aluminium (+2.2 percent), copper (+3.3 percent) and lead (+6.0 percent). Nickel alone (-3.1 percent) suffered losses.


Brent oil moved sideways with a minimal minus of 0.3 percent and ended the month at 60.50 US dollars per barrel. “The price fluctuations for oil are getting smaller and smaller. It remains to be seen whether the Turkey-Syria conflict will affect the oil price. So far that is not to be observed , says seal finally.