Silver is following gold downward

Gold and silver futures got off to another rocky start to begin the trading week. Silver fell as low as $20.84 a troy ounce, the lowest since September 2010, later rebounding to close 3 per cent higher at $22.91 in New York trading.

The price of silver was the standout mover in financial markets Monday as it took a hammering for the second trading session in a row, even as stocks remained relatively solid amid hopes over the U.S. economy. Silver’s stumble also brought down the price of gold; the yellow metal hit a one-month low of $1,338.10 an ounce and extended its slump for an eighth straight day. Gold has fallen more than 7% in May.

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Investors are losing interest in gold

Gold futures for June delivery dropped 0.3 percent to $1,432.60 an ounce at 10:46 a.m. on the Comex in New York. The price headed for the third straight decline, the longest slump since April 4. Through May 10, the metal dropped 14 percent this year.

Leading wealth managers have been switching out of commodities since the start of the year in favour of equities and bonds as they look for yield, a trend which accelerated in April with a major sell-off across the commodities field, led by a collapse in the gold price.

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Biggest gold sell-off in 30 years

Last friday, commodities tumbled on US retail sales news, led by metals and precious metals. But yesterday, gold plunged to $1,357 after disappointing news on China first quarter growth over the week-end.

The 7.7 percent increase in first-quarter Chinese gross domestic product from a year earlier marked the first time in data going back two decades that four periods in a row have seen growth of less than 8 percent. The figure released by the National Bureau of Statistics of China was also the worst miss of analyst estimates since the third quarter of 2008. Consequently, gold dropped below the threshold of $1,400 an ounce, after falling under $1,500 last week, its lowest level in two years.

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Commodities tumble on US retail sales news

Commodities tumbled to the lowest since July, led by a plunge in precious metals, as U.S. retail sales fell the most in nine months and consumer sentiment unexpectedly declined.

Gold fell into a bear market, and silver plummeted to the lowest since 2010. Crude oil slumped to a one-month low.

On the London Metal Exchange, a gauge of copper, aluminum, zinc, lead, nickel and tin fell 2.6 percent, the most in a year.

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Platinum group metals: birth of a global cartel

The two largest platinum group metals producers, South Africa and Russia who together control about 90% of the world’s supply, have finally decided to join forces to try to curb excess production bringing down platinum and palladium prices.

At the summit of the BRICS, held in Durban at the end of march, the South African Minister of Mineral Resources, Susan Shabangu, met her Russian counterpart Sergei Donskoy. The two ministers, following previous discussions in Moscow in November and Pretoria in February, signed on March 27th a framework agreement for the creation of an OPEC-type trading bloc to coordinate exports of platinum group metals.

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Worldbank commodity forecast for 2013 – Infographics

Following our article on Commodity Outlook – Forecast 2013, this is a graphical representation of the World Bank report for 2013.

Palladium rising steadily

After lagging behind other precious metals for much of the year, prices for the white metal—a key element in cars’ catalytic converters—are pulling ahead. Since the beginning of the month, palladium has risen almost 2%, hitting a one-month high on Friday.

Palladium is mostly used in gasoline exhausts, which are more common in the U.S. and China. Platinum, on the other hand, is for diesel-fueled cars like those driven around Europe. Demand for new vehicles in Europe remains anemic as the Continent struggles to fend off an economic slowdown.

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Silver Slips Below $40, Spooks Other Markets

“There’s a bit of commodity nervousness out there, and talk of large hedge funds liquidating positions is keeping buyers to the sidelines till they see some price stability,” said Sterling Smith, an analyst with Country Hedging.

Silver settled below $40 a troy ounce for the first time in almost a month as higher trading costs continued to force nervous traders out of the market.

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