Trading preview: Metals in Focus
Welcome to another week of trading! You’re kicking it off in the best possible place with our latest weekly trading preview. This week, we’ll give you a little update on where the most popular metals are at right now and we’ll also give you a rundown of the key events that should be inside your trading diary this week. Let’s get to it, shall we?
What’s up with metals at the moment?
Let’s have a look at the most popular precious metals, how they’ve been getting on recently and what their outlook might be.
Gold
Gold started off the final month of 2020 very strongly. It bounced back nicely following the previous week’s dip, which took it below $1,800 an ounce. XAU/USD currently sits at $1,837, up 3% on the week.
The uptick likely has something to do with a combination of the weaker US dollar, hopes of the bi-partisan $908 billion pandemic stimulus package getting passed (which would further weaken the dollar), and record-high COVID-19 daily infections. That’s all strengthening gold’s position as a safe haven against a very shaky buck.
Interested traders should definitely be keeping tabs on next week’s stimulus and budget package decisions in Congress.
Price on 02.01: $1,526.72
Price on 04.12: $1,837.39
YTD low: $1,474.46
YTD high: $2061.78
YTD % change: +20.3%
XAU/USD, 2020
Source: Tradingview
Silver
Silver has almost mirrored its yellow buddy in terms of performance, following a volatile end to November. The precious metal slipped to $22.60 on the last day of the month, but has recovered since, jumping a tasty 7% during last week.
Silver shares the same fundamental price effectors as gold, however some analysts suggest that the metals positive fortunes of late is not an issue of safe-haven, but rather the anticipation that the stimulus package will bring a fresh influx of cash into the economy, boosting demand for metals and driving up their price.
Safe-haven or not, the future is looking fairly bright for precious metals.
Price on 02.01: $17.97
Price on 04.12: $24.19
YTD low: $11.99
YTD high: $29.27
YTD % change: +34.6%
XAG/USD, 2020
Source: Tradingview
Platinum
It’s been about as volatile a year as you can imagine for platinum. This precious metal saw a much more aggressive slump at the end of Q1 than gold or silver.
Why was that? Well, platinum has a number of practical applications, chief among them being as a material used in jewellery making. Unsurprisingly, the market for jewellery declined significantly as a result of the pandemic. Which explains its phoenix-like performance as we moved into Q3, as lockdowns eased and people (clearly) drove straight to their nearest jewellers to celebrate the fact.
What a week it had last week, too, rising faster than either gold or silver, up 9.3% to touch $1,060 for the first time since September 2016. There’s good reason to believe it won’t stop there too long, as well.
Platinum’s chemical composition makes it an essential metal for cleaning toxins from the environment. With Biden bringing the US back into the Paris accords, there will be a big increase in industrial demand for the metal over the coming months and years. It’s also much cheaper than its similarly chemically awesome chums, Rhodium and Palladium.
One to watch, for sure.
Price on 02.01: $979.08
Price on 04.12: $1060.15
YTD low: $589.16
YTD high: $$1060.15
YTD % change: +8.3%
XPT/USD
Source: Tradingview
What’s on the trading agenda this week?
Here’s everything you need to keep track of this week.
Monday 7th December
No major events are planned.
Tuesday 8th December
● JPY — GDP Growth Annualised Final (Q3)
● EUR — GDP Growth Rate QoQ & YoY 3rd Est (Q3)
● EUR — ZEW Economic Sentiment Index (DEC)
Wednesday 9th December
● AUD — Westpac Consumer Confidence Index (DEC)
● CNY — Inflation Rate YoY (NOV)
● CAD — BoC Interest Rate Decision
Thursday 10th December
● GBP — GDP 3-Month Avg & YoY (OCT)
● EUR — ECB Interest Rate Decision
● USD — Inflation Rate YoY (NOV)
Friday 11th December
● USD — Michigan Consumer Sentiment Prel (DEC)
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Speak soon!
The Contentworks team
