The
price of rhodium ($2,410 an ounce) is leading the pack in precious
metals, followed by gold ($1,247.80 an ounce), palladium ($1,209.00 an ounce), platinum ($792.00 an ounce) and silver ($14.58 an ounce). Which one will make the big break in 2019 to a major upswing?
Platinum vs. Palladium
“I
believe that the current price of platinum at $805 is a good entry
point,” said Bill Stack, in an article posted on the U.S. Gold Bureau's blog Dec. 5. It has since dropped to $792.00 an ounce.
Difficulties in the auto sector are largely responsible for
platinum’s fall, “and I am not confident those issues will be
resolved in 2019,” Stack said. “Platinum could go lower, to $750,
with an upside potential of $870. This could come at the expense of
palladium, which has temporarily surpassed platinum due largely to
financial speculation. I believe 2019 will likely see platinum
overtake palladium in price, but both struggle due to difficulties in
the auto sector.” Commerzbank in Germany expects the platinum price
to increase to $900 by the end of 2019 with palladium ahead at
$1,100.
Gold vs. Silver
“While a significant floor has been
established for gold around $1,200, it is conceivable that we could
see a dip to $1,160 or so during a market disruption or sell-off
between now and December 2019,” Stack said.
“We are
only slightly above the current average mining costs for gold, and
below the average mining costs for silver,” Stacks said, based on
data through the third quarter of 2018. “While many try to project
gold and silver prices based mainly on supply and demand
considerations, I believe a more accurate method considers the costs
of production as a primary driver. If we use a base of $1,204 for
gold and $16.10 for silver, then it would appear to be much more
likely that any significant moves will be greater to the upside, than
the downside."
With
silver currently at a spot price of $14.45 (Dec. 5), it is currently
below primary mining costs of $16.10. This analysis alone indicates
that silver has significant room to spring to the upside. “Think of
that - an 11.4 percent increase in the silver price is needed, just
for silver miners to break even,” Stack said.
What
about the upside? “I believe gold will close 2019 near $1,351 an
ounce, and silver near $17.60,” Stack said. “While there may be
spikes to $1,402, and $18.40 respectively, I believe that is where we
will close the year.” Commerzbank sees gold at $1,350 and silver at $16.00 at the end of 2019.
Precious Metals Gains & Losses Year-to-Date (Dec. 8, 2018)
- Rhoduim – up 34%
- Palladium – up 13%
- Gold – down 4%
- Silver – down 16%
- Platinum – down 17%
