Price of gold declines

Exchange Rates 09.06.2020 analysis

This morning, the price of gold continued to decline. While the precious metal has not found reasons for its growth, however, investors do not intend to discount it.

Gold futures for August delivery fell 0.18% in value this morning on a trading floor in New York, sending it to the level of $ 1,702 per troy ounce. Support for precious metals settled at $ 1,671.70 per troy ounce, while resistance was fixed at $ 1,729 per troy ounce.

According to preliminary estimates by analysts, the physical volumes of gold today are at an extremely high level in the region above 100 million troy ounces. Such indicators are recorded for the first time in the history of the precious metals market.

The physical volumes of silver are approximately at a level similar to gold. Only silver is also a significant rally in price. As the reason for what is happening, one can point out the stabilization of demand for precious metals against the background of a soft stimulating policy of the central banks of states. However, this policy does not apply to silver, since it is not included in the list of reserve assets that regulators purchase in a period of economic stability.

Palladium and platinum now look much more confident compared to gold and silver. The main wave of demand for these metals is formed by the world’s largest car manufacturers. Since the crisis associated with the coronavirus pandemic has seriously affected the automotive industry and car sales are still low, the physical supply of platinum and palladium will exceed the demand for them. In view of this, it is more than likely that in the near future the cost of platinum and palladium will not only not increase, but may also be substantially adjusted downward. However, in the long run, metals have every chance of catching up in a rather short time. This is due to the fact that environmental requirements for cars are being tightened, and this increases the demand for autocatalysts.

Another issue that many analysts care about right now is the relationship between the value of gold and silver, which demonstrates the substitution potential of these two metals. It is worth recalling the fact from history when, during the crisis in 2008-2011, the soft financial policy of the states led to the ratio reduction ratio very much, and this led to higher prices on the precious metals market. Now the situation may be repeated as the correlation index of metals also began to decrease.

The cost of silver futures for July delivery fell by 0.23% today, which sent it to the mark of 17.852 dollars per troy ounce.

In contrast, copper futures for July delivery increased by 0.31%, allowing it to climb to the $ 2.589 mark per pound.

Source: Price of gold declines

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