AGORACOM Small-cap Investor Relations Blog

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Platinum Group Metals Shine

• An incredible year in the palladium market continues to the end.
• Platinum shows some signs of life.

By: Andrew Hecht

It could be an excellent time to start thinking about renaming the Platinum Group Metals. After all, since 2016, the price action in rhodium and palladium has left the namesake head of the group in the dust. Platinum has been a laggard. The old title as “rich man’s gold” is as inappropriate from an investment perspective today as it is from a social one.

Meanwhile, the price action in platinum in 2019 was not that bad. The platinum futures market looks like it will post a double-digit percentage gain compared to its closing price at the end of 2018. If the price action in the other members of the precious metals sector, including gold, palladium, and rhodium, are harbingers of the future for platinum, 2020 could turn out to be an exciting year for devotees of the metal that has not lived up to its reputation as a rare precious and industrial metal.

Meanwhile, the precious metals sector of the commodities market is barreling into 2020 after a bullish run in 2019. The Aberdeen Standard Physical Precious Metals Basket Shares ETF (NYSEARCA:GLTR) holds long positions in gold, silver, platinum, and palladium bullion. A diversified approach to the sector could be an excellent way to spread risk going into the new decade that is just around the corner.

Rhodium is the star

In 2016, the price of rhodium fell to a low at $575 per ounce. Rhodium is a byproduct of South African platinum output. The weakness in the platinum price, which fell to the lowest level since 2003 in 2018 when the price reached $755.70 per ounce, caused a decline in south African platinum production. Less platinum mining caused a deficit in the rhodium market, which does not trade on the futures exchange. In the physical market, the price of rhodium took off like a rocket ship.

Source: Kitco

As the chart highlights, rhodium was trading at a midpoint value of $5,840 per ounce on December 19, over ten times higher than the price in 2016. The deficit in the rhodium market could continue to push the price higher in 2020, and a test of the all-time high at just over $10,000 per ounce could be in the cards for the platinum group metal. Rhodium has been the best performing PGM over the past years. In 2019 alone, the price more than doubled, moving from below the $2,500 level at the end of 2018 to almost $6,000 per ounce on December 17.

An incredible year in the palladium market continues to the end

While rhodium is the metal with the most impressive percentage gain since the 2016 low, the price action in palladium pushed the price of the metal to a series of new all-time highs throughout 2019.

Source: CQG

The quarterly chart of nearby NYMEX palladium futures illustrates that, before 2017, the all-time peak came in 2001 at $1,090 per ounce. Palladium blew through that high like a hot knife goes through butter and has posted gains in the past seven consecutive quarters. The price was approaching the $2,000 per ounce level as of last week when it hit a high at $1,974.60 on the active month March futures contract on December 17.

The ascent of palladium is a function of the rising demand for catalytic converters for gasoline-powered automobiles. The “phase one” trade deal between the US and China could stabilize the Chinese economy lifting requirements for new cars and palladium-based catalytic converters in the world’s most populous nation. On the supply side of the fundamental equation for palladium, supplies come from South Africa and Russia. In Russia, platinum group metals are a byproduct of nickel output.

Platinum shows some signs of life

The price action in platinum has lagged rhodium and palladium over the past years, and 2019 has been no exception. However, platinum looks set to post a gain for the year that is coming to an end.

Source: CQG

The monthly chart shows that platinum closed 2018 at $788.50 and was trading around the $937 level on December 19. Platinum looks set to deliver a double-digit percentage gain as it was 18.8% higher than the 2018 closing price. However, its performance pales in comparison to the palladium and rhodium markets.

Source: CQG

The weekly chart displays that platinum has made higher lows and higher highs throughout 2019. The price range in the platinum market has been from $787.30 and $1,000.80 on the continuous futures contract. At $937 on December 19, the price of platinum around $43 above its midpoint for the year. While platinum is not breaking any records, the price action is going into 2020 in a bullish trend.

Industrial and precious metal

Platinum group metals have a myriad of industrial applications. Aside from automobile catalytic converters, the dense metals with high resistance to heat are required in oil and petrochemical refining, fiberglass manufacturing, medical devices, and a host of other applications. Of the three metals, platinum is the densest, with the highest boiling and melting point. Therefore, platinum can serve as a substitute for rhodium and palladium in industry.

Platinum also has a history as a financial asset and a store of value. Since the 1970s, platinum had mostly traded at a premium to gold as it is over ten times rarer than the yellow metal when it comes to annual output.

Source: CQG

The quarterly chart shows that platinum traded to an over $1,140 premium to gold in 2008, but it slipped to a discount in 2014 and never looked back. After falling to a low at a $600 discount to gold in 2019, platinum was still over $537 below the yellow metal on December 19.

Platinum moved almost 19% higher in 2019, gold broke out to the upside in June but slightly lagged platinum so far in 2019.

The GLTR ETF holds long positions in two of the three platinum group metals

Precious metals are going into the new decade on a bullish note after posting across the board gains in 2019. The low level of global interest rates could cause a continuation of bullish price action in 2020.

An ETF product that offers a diversified approach to a precious metals investment is the Aberdeen Standard Physical Precious Metals Basket Shares ETF. The fund summary for GLTR states:

“The investment seeks to reflect the performance of the price of physical gold, silver, platinum and palladium in the proportions held by the Trust, less the expenses of the Trust’s operations. The Shares are designed for investors who want a cost-effective and convenient way to invest in a basket of Bullion with minimal credit risk.“

Source: Yahoo Finance

The most recent top holdings of GLTR include:

Source: Yahoo Finance

GLTR has net assets of $463.08 million and trades an average of 22,754 shares each day. The ETF product charges an expense ratio of 0.60%.

Platinum continues to offer the most compelling value proposition in the precious metals sector at around the $930 per ounce level. However, the trend in all of the precious metals will enter 2020 in bullish mode.

The Hecht Commodity Report is one of the most comprehensive commodities reports available today from the #2 ranked author in both commodities and precious metals. My weekly report covers the market movements of 20 different commodities and provides bullish, bearish and neutral calls; directional trading recommendations, and actionable ideas for traders. I just reworked the report to make it very actionable!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: https://seekingalpha.com/article/4313462-platinum-group-metals-shine

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Deficit-hit palladium takes aim at $2,000 ceiling in record run

• “Supply is tight in the palladium market and when you’re adding the speculation about a potential pick-up in demand due to recovery in the global economy, you have a perfect storm of bullish news continuing to keep it supported,” Saxo Bank analyst Ole Hansen said.

(Reuters) – Scarce palladium soared on Tuesday, nearing a breach of the $2,000 an ounce level for the first time, with a “phase one” U.S.-China trade deal driving prospects of a pick-up in demand and helping the autocatalyst metal extend a record run.

Palladium was up 0.6% at $1,989.58 an ounce at 1035 GMT, after hitting an all-time high of $1,998.43.

“Supply is tight in the palladium market and when you’re adding the speculation about a potential pick-up in demand due to recovery in the global economy, you have a perfect storm of bullish news continuing to keep it supported,” Saxo Bank analyst Ole Hansen said.

However, he added: “Liquidity is poor, which means that if we see a correction, it can be quite brutal and could take palladium back down towards $1,850, although there are no signs of that right now.”

The phase one trade deal has been “absolutely completed”, a top White House adviser said on Monday. However, Chinese officials have been more cautious, emphasizing the dispute has not been completely settled.

Palladium, used mainly in vehicle catalytic converters, has gained more than 57% so far this year because of a sustained supply crunch.

“We look set for an imminent test above $2,000,” MKS PAMP said in a note.

Elsewhere, gold prices rose due to uncertainty driven by a lack of concrete details about the interim trade deal.

Spot gold rose 0.2% to $1,478.41 per ounce. U.S. gold futures were also up 0.2%, at $1,482.90.

The trade dispute will be an influencing factor for gold throughout next year, said Commerzbank analyst Daniel Briesemann, adding a phase two deal would be much more difficult since a lot of critical issues had been left out of the current agreement.

“We must be prepared for some volatility and uncertainty. It’s not yet a done deal.”

Gold, considered a safe investment during political and economic uncertainty, has gained about 15% this year, mainly driven by the 17-month-long tariff war and its impact on the global economy.

Also helping bullion, European stocks slid from record highs on reports that Britain’s prime minister was ready to play rough in Brexit talks, souring sentiment somewhat after a record rally during the Asian session on the trade optimism.

Silver was 0.2% higher at $17.07 per ounce, while platinum gained 0.3% to $932.32.

Source: https://www.onenewspage.us/n/Business/1zkl56ztmy/Deficit-hit-palladium-takes-aim-at-000.htm

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Palladium prices rally to record high

• “Palladium has been on a multi-year run that shows few signs of abating,” John Ciampaglia, chief executive officer of Sprott Asset Management

by Denton Staff Contributor

Palladium futures rallied Friday to their highest settlement on record, extending last year’s advance and narrowing their price spread with gold to the smallest in roughly 16 years.

“Palladium has been on a multi-year run that shows few signs of abating,” John Ciampaglia, chief executive officer of Sprott Asset Management, wrote in a recent report. “Palladium is close to becoming the most ‘precious’ of precious metals.”

Palladium, which is used in pollution-controlling catalytic converters on gasoline-powered vehicles, has been significantly narrowing its spread with gold prices.

‘Palladium is close to becoming the most “precious” of precious metals.’ John Ciampaglia, Sprott Asset Management

On Friday, March palladium  added $34.10, or 2.8%, to settle at $1,234.40 an ounce. The finish was the highest based on FactSet records dating back to November 1984, topping the previous record settlement of $1,201.30 from Dec. 19.

February gold  fell $9, or 7%, to finish at $1,285.80 an ounce dulled investment demand in the yellow metal. That helped narrow its spread with palladium futures down to $51.40, the lowest since November 2002, according to Dow Jones Market Data. The last time palladium settled higher than gold was in October 2002.

Overall, growing global demand for the industrial metal has fed worries about tighter supplies.

“While the escalating U.S.-China trade war hurt many commodities in 2018, it couldn’t dent palladium’s rise,” said Ciampaglia. “Demand for palladium was especially strong last year, as environmental concerns have prompted a global shift from diesel to gasoline and hybrid vehicles.”

“Not even the 2018 slowdown in China’s auto market, the world’s largest, dampened demand,” he said.

Auto sales in China, the biggest global market, were on track for their annual decline in three decades after plunging 16% in November.

News Friday on progress toward a U.S.-China trade deal was upbeat, however. China’s Commerce Ministry confirmed that a delegation of U.S. officials will travel to Beijing for a new round of trade talks on Monday and Tuesday, .

“Supply shortages continue to support palladium’s performance, with strong multi-year growth in palladium demand now straining a fixed supply,” Ciampaglia said. “Palladium is especially scarce and its supply is inelastic since it is usually a by-product of ores that are being mined for other metals, like platinum and rhodium.”

Source: https://dentondaily.com/palladium-prices-rally-to-record-high-now-nearing-golds-level/

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Palladium Barrels Toward $2,000 as Red-Hot Rally Shreds Records

• Palladium’s blistering rally shows no sign yet of cooling off as records tumble

• the precious metal advanced to the highest ever on Friday as it climbed for an unprecedented 16th straight day.

Ranjeetha Pakiam, Bloomberg News

(Bloomberg) — Palladium’s blistering rally shows no sign yet of cooling off as records tumble: the precious metal advanced to the highest ever on Friday as it climbed for an unprecedented 16th straight day.

Prices are now barreling toward $2,000 an ounce as mining disruptions in major producer South Africa add to supply concerns, tightening a market already hobbled by a persistent deficit.

Palladium is headed for a seventh quarterly climb as demand for the metal used in autocatalysts has been strengthened by tighter emissions rules, with Citigroup Inc. forecasting it could hit $2,500 an ounce next year. In South Africa, rolling blackouts have hurt miners’ operations after state utility Eskom Holdings SOC Ltd. announced record power cuts.

Spot prices climbed as much as 1.3% to $1,965.82 an ounce, and traded at $1,960.93.

To contact the reporter on this story: Ranjeetha Pakiam in Singapore at [email protected]

To contact the editors responsible for this story: Phoebe Sedgman at [email protected], Jake Lloyd-Smith

Source: https://www.bnnbloomberg.ca/palladium-barrels-toward-2-000-as-red-hot-rally-shreds-records-1.1362097

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Palladium posts all-time high that tops gold’s record price

By: Allen Sykora

• Palladium prices have once again hit a fresh all-time high, in the process exceeding gold’s record from nine years ago, as demand for the palladium in catalytic converters remains robust, traders and analysts said.

An additional impetus this week was continuing power issues in South Africa, some observers added.

As of 10:31 a.m. EST, spot palladium was up $26 to $1,922 an ounce and peaked at $1,935.30. Commerzbank analysts pointed out that this topped gold’s peak near $1,911 set back in 2011.

Platinum was up $2 to $938 an ounce and peaked at $944.40, its strongest level since Nov. 4.

TD Securities described the platinum group metals as “on fire as South African power woes add to supply concerns, particularly for palladium, which is in short supply.”

A desk trader downplayed the South African issue but emphasized the voracious demand for palladium in catalytic converters. The metal moved to a wide price premium over platinum in the two years, since palladium is used for catalytic converters in gasoline-powered cars, popular in the No. 1 and No. 2 car markets of China and the U.S.

“Palladium is trading strictly off of the fundamentals,” the trader said. “We have such strong demand…for catalytic converters.”

In particular, he explained, the consumption has increased in China and other countries due to more stringent environmental regulations. This has meant more loadings of palladium in each vehicle. In fact, some analysts said this has more than offset a decline in car sales during 2019.

“Palladium has been in a structural deficit for the last few years,” the desk trader said. “The increased demand due to higher emissions regulations in China, and a little bit in India, is just pushing that deficit deeper and deeper, which is driving the price…There is just a supply issue with people trying to get metal.”

Spot palladium has soared by 52% since the start of the year.

The trader said the South African power issues have been on traders’ radars for a while now. He pointed out that the load shedding has abated some from earlier in the week,
yet palladium has continued to rise anyway due to the strong demand, particularly from China.

“Even though we regard the steep price rise as exaggerated, there is no end in sight to the rally,” said Daniel Briesemann, metals analyst with Commerzbank. “Alongside palladium, platinum has also gained significantly for the second day in a row….This is probably related to the power outages in South Africa.”

Rolling power blackouts have occurred this week in South Africa, which along with Russia, is one of the world’s two leading producers of platinum group metals. This has impacted mining operations, which rely on electricity for operations that occur far below the ground, according to news reports.

Flooding after heavy rains exacerbated problems at public utility Eskom, according to news reports. The country’s president has also attributed some of the issues to suspected sabotage at power stations. Eskom provides more than 90% of South Africa’s power.

By Allen Sykora

For Kitco News

Source: https://www.kitco.com/news/2019-12-12/Palladium-posts-all-time-high-that-tops-gold-s-record-price.html

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces in the Inferred. Learn More.

Palladium zooms past $1,860/oz

• Palladium was up 0.3% at $1,845.80 an ounce, after hitting a new high of $1,861.71 earlier in the session.
• The metal has been breaking records daily since Nov. 25.

“Palladium positioning is slightly counter-intuitive to the price action, implicitly confirming heavy OTC interest from the long side,” INTL FCStone analyst Rhona O’Connell said in a note. “After weak longs were shaken out in early November another push to the upside is now approaching resistance from the uptrend.”

Concerns that supply of the metal used in car exhaust systems could run out has helped to lift prices by more than 47% this year alone, despite a weakening auto sector.

Silver shed 0.4% to $16.95 an ounce and platinum gained 0.4% to $903.51.

Source: https://www.cnbc.com/2019/12/02/gold-markets-us-dollar-china-economy-in-focus.html