Platinum Heads Metals Leaderboard

Precious metals are back on taper-watch which has put prices under pressure once again, while platinum group metals (PGMs) have done better, both in relative but also absolute terms. Over the past month we have seen platinum at +4.8 percent and palladium at +4 percent, placing them amongst the top three performing commodities overall. Meanwhile, gold is unchanged and silver is down by almost 3 percent.

Gold still under pressure

Gold has been under pressure since the stronger-than-expected US GDP and job reports last week. Meanwhile, silver has done even worse, resultingd in a return to the October low at USD 20.50/oz. A break through this level could signal a potential move down to the 19.25 to 19.50 area of support and would further support the current outperformance of gold over silver, as seen above. The sell-off in gold has up until now not shown any signs of accelerating despite the headwind that rising bond yields and taper talk creates for the attractiveness of metals as an alternative investment. It gives a clear indication that most, if not all, of the distressed selling - triggered by the need to reduce exposure earlier this year - is now over.

So while there are no clear triggers at the moment to support the upside potential, selling seems to have been relatively subdued with flows into Exchange Traded Products actually showing a small uptick during the past week. For now though momentum is negative with no clear signs of changing just yet. So on that basis, new established shorts have so far no reason to worry too much unless we start to break the previous day's high which is USD 1,286/oz for gold and USD 21.40/oz for silver.

Platinum - best performing metal

Platinum has been the best performing metal over the past month but on a wider scale palladium is trading close to the most expensive price ratio level in a decade. Strong investment demand as seen through holdings in exchange traded products ETPs), together with increased industrial demand, has lead to the biggest deficit for platinum since 1999, according to a report by Johnson Matthey, the specialty chemicals company and a leading specialist in PGMs. In this report another deficit for palladium is seen, but that would shrink as consumption is expected to fall faster than supply.