Not All Precious Metals Are Equal

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By Rudi Filapek-Vandyck

Precious metals have staged a gradual recovery since the global liquidity crisis rose to the surface and caused turmoil for global equity and debt markets from late July/early August. It may have taken a little longer than usual, but since August 17 precious metals prices have risen – and markedly so.

Bullion gold is enjoying a price around US$700/oz, while silver is currently priced above US$12.50/oz. The price for platinum now stands at US1,290/oz. Palladium has so far been the laggard in the recovery rally since August 17, currently trading at around US$335/oz.

Precious metals experts at Credit Suisse have observed price volatility for gold and platinum has been remarkably less than for silver and palladium. In addition, they also note that both silver and palladium are in a physical supply surplus market. As a result of this, both markets are regarded as more dependent on speculative trading activity and overall market sentiment. This makes silver and palladium in the experts’ eyes more vulnerable to developments in other financial markets than gold or platinum.

Hence why Credit Suisse prefers gold and platinum above silver and palladium to play the current precious metals recovery. Credit Suisse believes the outlook for gold is simply “positive”.

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