the Monthly Global Precious Metals Index (MMI) fell 0.9% for this month’s index, mainly due to falling silver prices.
Did you know that MetalMiner forecasts for several precious metals in the MetalMiner Insights Platform?
Rising interest rates tend to dampen investor sentiment towards precious metals. Gold and silver generally act as a store of value, especially during times of high inflation. Therefore, the Fed’s half-point hike in interest rates can largely be attributed to recent price weakness. Essentially, the market priced in the policies deployed by the Fed.
In times of uncertainty, gold and silver are considered safe havens. In this case, the ongoing conflict in Ukraine, stubbornly high inflation and the VIX (volatility index) provide tailwinds for precious metals. Silver, on the other hand, did not experience the same highs. This is precisely why many experts say now is the time.
Source: MetalMiner Analytics
However, from a technical analysis point of view, prices started to break down. Indeed, the macro trend has already trended lower, while the price action shows signs of market structure moving lower on daily/weekly time frames. Additionally, support levels and price floors have yet to be established. As you can see, this let silver fall through previous lows and remove any retail support.
Gold prices look like silver prices
The precious metals MMI also shows that gold prices also continued their downward trend. This is mainly due to a recent change in market structure from late April. While past lows continue to show weakness, price action suggests that gold will seek stronger support levels. We suggest these will be between $1780 and $1820/troy ounce as shown in the chart.
Platinum has also seen its prices drop
Platinum prices are down more than 5% month over month. Of course, the number one end application for platinum remains automatic exhaust systems. And while global automakers are showing some month-over-month growth, output remains well below pre-pandemic production levels.
As always, buyers should familiarize themselves with the five metal sourcing best practices.
In other news: Dollar gains strength
The US Dollar continued its recent rally, rising from 98.63 to above 103. Generally, a strong dollar equates to lower commodity prices. Interestingly, the CRB index appears to have held onto its gains while trending sideways in the short term. Although the April CPI eventually fell (to 8.3%), the decline was only the result of declines in energy prices. The remaining core index has not found a bottom yet. Still, according to the WSJ, the core price index rose 0.6% after March’s 0.3% gain.
Real metal prices and trends
- Japanese silver, which fell 9.8% to $7.26 per ten gram, was the biggest driver. Meanwhile, US silver fell 8.47% to $22.74/oz, and Japanese platinum fell 8.35% to $29.17/gram.
- The only upside move came in US palladium bullion which rose 2.32% to $2,254 an ounce. However, it should be noted that these prices have since dropped.