Metals Annual Market Recap – 2017

• Gold
• Silver
• Platinum
• Palladium
• Copper

Gold

Nearby gold futures are likely to close nearly 10 percent higher in 2017. From January to September, the market zig-zagged higher, rising on geopolitical events and falling whenever the Fed talked about raising interest rates. After reaching its high for the year in September, the market traded mostly lower until early December. This was its biggest sell-off of the year.

Nearby Gold is currently trading $1278.80, up $107.20 or +9.15%.

Some traders say that gold was supported throughout the year because investors were betting against President Trump succeeding. They felt that he and the other Republicans would have a difficult time accomplishing most of his campaign promises which included cutting taxes, repealing Obamacare and increasing spending on infrastructure. Although Trump did not repeal Obamacare, he was able to pass the biggest U.S. tax overhaul in 30 years in late December.

Geopolitical and political issues underpinned the market at times. The main geopolitical concern was North Korea. It launched several ballistic missiles in 2017, proving to the world that it had the capability of reaching the United States with a nuclear warhead.

At times, it appeared the Hermit nation was preparing to go to war with the United States, but diplomatic efforts by the U.S., Russia, and China may have diminished the chances. At least that’s what the price action showed us because, after the initial bullish reaction to the news by gold traders, each subsequent reaction was met with a muted response.

A weaker U.S. Dollar also helped support higher gold prices in 2017. Although the Fed raised its benchmark interest rate three times this year, the U.S. Dollar still weakened against a basket of major currencies. This was because other central banks were also raising rates or starting to end stimulus. Additionally, throughout the year, the Fed signaled a series of gradual rate hikes and that its cycle of rate hikes might end sooner than planned.

Gold reached a cyclical bottom in early December that could carry over into the new year. This move was driven by the Fed’s last monetary policy statement which showed the central bank was planning only three rate hikes in 2018 due to concerns over long-term inflation.

Silver

Nearby Comex Silver futures are trading $16.44, up $0.07 or +0.42%. Traders didn’t take advantage of the weaker U.S. Dollar in 2017. Demand for silver was extremely low as investors sought better returns on other investments such as Bitcoin, equities, and gold.

Platinum

Platinum had a tough year. Although the industrial metal is rarer than gold and is usually valued more highly, with the exception of periodic fluctuations, oversupply in platinum production in South Africa kept a lid on prices most of the year.

Nearby Platinum is currently trading $923.00, up $7.80 or +0.85%.

Prices would likely rally if producers could cut supply by 300,000 to 400,000 ounces.

Palladium

Industrial metal Palladium had a banner year in 2017. As we near the end of the year, Nearby Palladium futures are trading $1042.30, up $359.65 or +52.68%.

Palladium prices hit a 17-year high on Friday as strong demand from auto catalyst makers reinforced the prospect of market shortages. Spot palladium hit its highest since February 2001, though slowing car sales are expected to challenge further gains. About 80 percent of global palladium demand will come from autocatalysts for gasoline-powered cars, which many now prefer over diesel-fueled vehicles.

Copper

Nearby copper futures had a volatile year in 2017. A weaker U.S. Dollar helped generate strong foreign demand for the dollar-denominated industrial metal. Although supply is expected to exceed demand in early 2018, it was under pressure throughout the year due to periodic labor strikes that shut down a few major mining operations. A recovery in China also fueled speculation about increased demand. The market was also underpinned by robust hedge fund buying which at times created extremely overbought trading conditions.

Nearby Comex High-Grade Copper futures are trading at $3.2385, up $0.6445 or +24.85%.