Gold Takes A Breather Ahead of FOMC Minutes – What’s Next?

Earlier this week, traders shifted their attention from Gold and Silver to Platinum, Palladium and Copper on bets that rising demand for industrial metals in 2021 – will surpass supply and support a long-term rally.

While big moves in Gold and Silver prices remain inevitable down the road, the monetary metals are currently taking a back seat to the industrial metals.

Platinum prices rallied for a third straight session on Tuesday, hitting a six-and-a-half-year high. After spending most of 2020 lagging behind – Platinum prices have surged almost 25% this year, outperforming many of its peers.

Platinum’s explosive rally also pulled sister metal Palladium higher, which is now up 70% in the past 12 months. Meanwhile, Copper prices hit their highest level since October 2012.

Over the past year, Gold and Silver prices have been fuelled by unprecedented levels of global monetary and fiscal expansion, giving their role as an inflation hedge. That driver is unlikely to go away anytime soon, with the ‘reflation trade’ expected to fully kick in this year.

Looking ahead to this week, the major focal point for traders will be the FOMC and European Central Bank monetary policy meeting minutes, due for release on Wednesday and Thursday, respectively. Traders will be closely monitoring the meeting minutes for clues on future stimulus.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions: