With inflation fears lurking everywhere and surprisingly hawkish statements from the Fed, June was an unusual month in the precious metals space. This article will consider how each metal performed.
A Fed statement about paring back stimulus money gave gold its toughest month since November 2016. The metal currently sits at $1775.50/oz, down 6.68%.
“(Gold) prices are still in a downtrend. We’re seeing a corrective bounce,” said Jim Wyckoff, senior analyst with Kitco Metals.
Wyckoff pointed to gold’s uptick on Thursday as a result of bargain-buying on a weak dollar and Treasury yields. The upcoming jobs report is going to provide more information about the state of the economy and could deflate the Fed’s stance.
July could be a great opportunity for investors to get the yellow metal into their portfolios, as the long-term prognosis for gold remains bullish it appears that the metal has hit its bottom. In the short-term, however, a lot will depend on the upcoming jobs report, the performance of the US dollar, and whether or not the Fed walks back some of its hawkish posturing.
For investors looking for exposure to gold, the Sprott Physical Gold Trust PHYS* holds gold bullion. Sprott also offers two actively managed precious metals mining ETFs: the Sprott Gold Miners ETF (SGDM ), which tracks gold majors, and the Sprott Junior Gold Miners ETF (SGDJ ), which tracks junior gold miners.
Silver’s June was significantly less swingy than gold. It ended the month at $26.21/oz, down from $28.13 at the start of the month.
The metal’s long-term future looks quite strong, with supply issues driving what could be explosive growth.
Pawn Stars’ Rick Harrison, in an interview with Kitco news, said "it’s very hard to keep any bullion in stock and the bullion I do have I’m selling them for $4, $5 over spot when it comes to silver… I know a lot of people in this business…physical delivery is very hard right now.”
Investors can access physical silver through the Sprott Physical Silver Trust (PSLV ), which is a closed-end trust that holds LGD silver bars.
Platinum and Palladium
June was a tough month for both palladium and platinum. Mid-month, Palladium tumbled 10% to $2,517, while platinum fell 6.6% to $1,048.
Both metals started to recover in the latter half of the month, with palladium currently at $2,764/oz and platinum at $1,076.
Like gold and silver, the long-term outlook for these metals remains solid. They are essential in hybrid automobile manufacturing, and as climate change worsens, the demand for smarter cars will continue to rise.
Investors are also starting to put their money into uranium miners, even as its spot price remains steady, as a play on environmentally sound technologies.
Rare metals such as cobalt, lithium, silver, and graphite will continue to face supply issues, especially as lower emission technology grow in popularity. Nuclear power also looks like an increasingly necessary step in the transition to a zero-emissions world.
For investors looking to access spot uranium, Sprott has a physical uranium fund in the works.
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