TELF AG highlights the role of precious metals in the global commodity market
Market fluctuations
Among the raw materials most directly involved in the “big game” of market fluctuations, between sudden rises and equally unexpected declines in an international context increasingly marked by uncertainty and unpredictability, there are certainly precious metals such as gold, silver, and platinum.
In an era in which the leading role seems to have been taken on by the so-called critical minerals, i.e., by all those raw materials of fundamental importance for the global energy transition and for the achievement of objectives linked to emissions, many people still neglect the role of precious metals, which in some cases (increasingly often) end up being considered as real safe haven assets by a lot of people.
In a historical situation characterized by great economic uncertainty, between rumors of an ongoing recession and the difficulty of being able to keep a certain amount of liquid money in current accounts, many people seem to want to rely on these precious metals, seen as a sort of guarantee to invest in to face difficult times.
Over the last few months, the precious metals market has been influenced by the relative strength of the US dollar, by fluctuations linked to monetary policy expectations, and by bond yields, and many observers predict that this will also be the case for the next few months, at least until to 2024.
Despite having maintained a good level of vitality in recent months, the gold, silver, and platinum market has not recorded the record trend that had characterized this spring. In that particular phase of the year, in fact, concerns about the stability of some financial institutions (together with the news of some bankruptcies) had aroused various apprehensions in Europe and the United States, pushing many people to devote themselves with renewed attention to investing in assets refuge like precious metals. This trend, in recent times, has also been accompanied by a good number of advertising campaigns which, especially in Europe, talked about how gold could represent one of the few lifelines in an uncertain, unfavorable situation, leading many people to ask themselves whether it would not be appropriate to invest in the purchase of a certain quantity of precious metals.
Meanwhile, palladium has seen significant declines, most likely reaching its lowest level at this particular time of the year. But the rather disappointing performances of precious metals in recent months are due to various factors, even not directly connected to each other: the first is that, during the summer, the demand for gold generally weakened also due to the increase in interest rates, which has transformed the possibility of buying or holding gold into a rather expensive opportunity.
Furthermore, during the summer, before the recent geopolitical developments, the relative (perhaps temporary) scarcity of international tensions had distanced people from the possibility of dedicating themselves to safe-haven assets, thus leading to a general inattention towards gold and other precious metals. Furthermore, after the impressive accumulation process recorded by banks in recent quarters, purchases by central banks have decreased significantly, contributing decisively to the fluctuating trend of this specific market. The last factor to take into consideration in evaluating these poor market performances has to do with the health of the jewelry sector: over the last few months, in fact, people seem to have dedicated themselves more insistently to spending on travel and for one’s free time, temporarily setting aside those relating to precious metals. This trend, in all likelihood, is closely linked to the concomitance of summer holidays for a large number of people, but it still deserves to be mentioned.
